SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
VANGUARD ADMIRAL FUNDS
VANGUARD BALANCED INDEX FUND
VANGUARD BOND INDEX FUNDS
VANGUARD CALIFORNIA TAX-FREE FUNDS
VANGUARD CONVERTIBLE SECURITIES FUND
VANGUARD EXPLORER FUND
VANGUARD FENWAY FUNDS
VANGUARD FIXED INCOME SECURITIES FUNDS
VANGUARD FLORIDA TAX-FREE FUND
VANGUARD HORIZON FUNDS
VANGUARD INDEX FUNDS
VANGUARD INSTITUTIONAL INDEX FUNDS
VANGUARD INTERNATIONAL EQUITY INDEX FUNDS
VANGUARD MALVERN FUNDS
VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS
VANGUARD MONEY MARKET RESERVES
VANGUARD MORGAN GROWTH FUND
VANGUARD MUNICIPAL BOND FUNDS
VANGUARD NEW YORK TAX-FREE FUNDS
VANGUARD NEW JERSEY TAX-FREE FUNDS
VANGUARD OHIO TAX-FREE FUNDS
VANGUARD PENNSYLVANIA TAX-FREE FUNDS
VANGUARD PRIMECAP FUND
VANGUARD QUANTITATIVE FUNDS
VANGUARD SPECIALIZED FUNDS
VANGUARD STAR FUNDS
VANGUARD TAX-MANAGED FUNDS
VANGUARD TREASURY FUND
VANGUARD TRUSTEES EQUITY FUND
VANGUARD VARIABLE INSURANCE FUND
VANGUARD WELLESLEY INCOME FUND
VANGUARD WELLINGTON FUND
VANGUARD WHITEHALL FUNDS
VANGUARD WINDSOR FUNDS
VANGUARD WORLD FUND
- --------------------------------------------------------------------------------
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IMPORTANT PROXY NEWS
FOR VANGUARD FUND SHAREHOLDERS
================================================================================
All Vanguard funds will host a Special Meeting of Shareholders on December 3,
2002, at Vanguard's offices in Charlotte, North Carolina. The purpose is for
shareholders to vote on several proposals regarding fund investment policies,
and to elect a board of trustees for each Vanguard fund.
The first few pages of this booklet include a letter to shareholders from John
J. Brennan, Chairman and Chief Executive Officer of the Vanguard funds, and
information on how to cast your vote. Before you vote, please read the proxy
statement for a complete understanding of our proposals.
Please Vote Immediately!
You can vote through the Internet, by telephone, or by mail. Details on voting
can be found after the Chairman's letter in the section entitled "Important
Information About Voting."
[THE VANGUARD GROUP LOGO]
[PHOTOGRAPH OF JOHN J. BRENNAN]
An Important Proxy Message
From Vanguard Chairman
John J. Brennan
Fellow Vanguard Shareholder,
All Vanguard(R) funds will hold a Special Meeting of Shareholders on December 3,
2002, at Vanguard's offices in Charlotte, North Carolina. This booklet contains
a proxy statement explaining several proposals that the funds' trustees are
asking shareholders to approve at the meeting. For the most part, these
proposals involve "fine-tuning" your funds' investment policies to keep pace
with a dynamic investment environment. However, there are proposals of
relatively greater significance for shareholders of the Vanguard(R) U.S. Stock
Index Funds and Vanguard(R) Utilities Income Fund. In addition, a core part of
the proxy statement is a proposal to elect trustees for all Vanguard funds.
While the upcoming shareholder meeting was not called with the current wave
of corporate misdeeds in mind, this seems a particularly appropriate time to
focus attention on the individuals responsible for governing the Vanguard funds.
As we have said before, investing involves a fair measure of faith, and, in the
end, that faith depends on the integrity and character of the people in whom
shareholders, employees, and the public are asked to place their trust. Six of
the seven nominees in whom we are asking you to continue to place your trust are
truly independent of Vanguard management (as Vanguard's chief executive officer,
I am the lone "inside" nominee). Each of the six already serves as a Vanguard
fund trustee, and I am immensely proud of the integrity, professionalism, and
commitment that each of them brings to the task of looking out for your
interests.
I encourage you to exercise your rights in the governance of the Vanguard funds
by reviewing our proxy statement, and then voting either through the Internet,
by telephone, or by mail as soon as possible. No matter how many shares you own,
your vote is important.
Sincerely,
/S/John J. Brennan
John J. Brennan
Chairman and Chief Executive Officer
September 23, 2002
IMPORTANT INFORMATION ABOUT VOTING
I ONLY HAVE A FEW SHARES--WHY SHOULD I BOTHER TO VOTE?
Because your vote makes a difference. If many shareholders choose not to vote,
the funds may not receive enough votes to reach quorum and conduct the
shareholder meeting in December. If that appears likely to happen, the funds
will have to send additional mailings to shareholders to try to get more
votes--a process that would be very costly for the funds and thus for you as a
fund shareholder.
WHAT'S THE DEADLINE FOR SUBMITTING MY VOTE?
We encourage you to vote as soon as possible to make sure that your fund
receives enough votes to act on the proposals. The final opportunity to cast
your vote is at the shareholder meeting.
WHO GETS TO VOTE?
Any person who owned shares of a Vanguard fund on the "record date," which was
September 6, 2002, even if that person later sold those shares.
HOW DO I VOTE?
You may vote in any of four ways:
1. Through the Internet at www.proxyweb.com/vanguard (or by going to
www.vanguard.com and clicking on "Vote My Proxy").
2. By telephone, with a toll-free call to 1-888-221-0689.
3. By mail, with the enclosed proxy card.
4. In person at the shareholder meeting.
We encourage you to vote via Internet or telephone using the 12-digit "master
control" number on the enclosed proxy card, because these methods save the funds
the most money (no return postage!). We're also introducing the EzVote card,
which allows you to vote once on behalf of multiple accounts, rather than
completing several different proxy cards. If you prefer, you still may vote
separately for each of your accounts.
HOW DO I SIGN THE PROXY CARD?
Individuals should sign their name exactly as it appears on the enclosed proxy
card. Unless you have directed otherwise, either owner of a joint account may
sign the card, but again, the owner must write the name exactly as it appears on
the card. The proxy card for other types of accounts should be signed in a way
that indicates the signer's authority--for example, "John Brown, Custodian."
II
THE VANGUARD FUNDS*
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
All Vanguard funds will host a Special Meeting of Shareholders on TUESDAY,
DECEMBER 3, 2002, AT 9:30 A.M., EASTERN TIME, at Vanguard's North Carolina
offices: 2605 Water Ridge Parkway, Two North Falls Plaza, Rooms 517 and 519,
Charlotte, NC 28217. This joint meeting of the Vanguard funds is being held so
that shareholders can vote on proposals to:
1. Elect trustees for each fund;
2. Change certain funds' policy on investing in other mutual funds;
3. Authorize the trustees of certain index funds to change target
indexes;
4. Reclassify certain index funds as nondiversified;
5. Change two money market funds' industry concentration policy;
6. Change certain bond and balanced funds' policy on borrowing
money;
7A. Change the Utilities Income Fund's investment objective; and
7B. Change the Utilities Income Fund's concentration in utilities
stocks.
By Order of the Board of Trustees,
R. Gregory Barton, Secretary
September 23, 2002
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YOUR VOTE IS IMPORTANT!
You can vote easily and quickly over the Internet, by toll-free telephone call,
or by mail. Just follow the simple instructions that appear on your enclosed
proxy card. Please help your fund avoid the expense of a follow-up mailing by
voting today!
================================================================================
*Please see Part V of this booklet for an alphabetical list of all Vanguard
funds.
III
THE VANGUARD FUNDS
Special Meeting of Shareholders
December 3, 2002
PROXY STATEMENT
Introduction
This combined proxy statement is being provided to you on behalf of the board of
trustees of each Vanguard fund. We have divided the proxy statement into five
main parts:
Part I An Overview of Our Proposals begins on page 1.
Part II Proposal Details begins on page 2.
Part III Information on the Funds' Independent Accountants begins on
page 22.
Part IV More on Proxy Voting and Shareholder Meetings begins on page
24.
Part V Fund and Investment Adviser Information begins on page 26.
Please read the proxy statement before voting on our proposals. If you have
questions about the proxy statement, or if you would like additional
information, please call us toll-free at 1-800-992-0833. Participants in a
company-sponsored 401(k) or other retirement plan administered by Vanguard
should call us at 1-800-523-1188. This proxy statement was mailed to
shareholders beginning the week of September 23, 2002.
Annual/Semiannual Reports. Each fund's most recent annual and semiannual reports
to shareholders are available at no cost. To request a report, please call us
toll-free at 1-800-992-0833, or write to us at The Vanguard Group, P.O. Box
2600, Valley Forge, PA 19482-2600. The reports also are available at our
website, www.vanguard.com. Participants in a company-sponsored 401(k) or other
retirement plan administered by Vanguard should call us at 1-800-523-1188.
================================================================================
ATTENTION: Vanguard Variable Insurance Fund Shareholders
You have the right to instruct your annuity provider on how to vote the Vanguard
Variable Insurance Fund shares held under your plan. You can issue voting
instructions for these shares over the Internet, by toll-free telephone call, or
by mail. Just follow the simple instructions that appear on your enclosed proxy
card. Note that your annuity provider will "shadow vote" any fund shares for
which contract owners fail to provide voting instructions. This means that the
uninstructed shares will be voted in proportionately the same manner--either
"For," "Against," or "Abstain"--as the instructed shares.
================================================================================
IV
1
PART I AN OVERVIEW OF OUR PROPOSALS
Shareholders of all Vanguard funds are being asked to vote on a number of
proposals. Not all proposals apply to each fund. Below is a list of the
proposals and the specific Vanguard funds to which they apply. Only shareholders
of record on September 6, 2002, are entitled to vote on a fund's proposals.
PROPOSALS OF VANGUARD FUNDS
1. ELECT TRUSTEES FOR EACH FUND. Applies to all Vanguard funds.
2. CHANGE THE FUND'S POLICY ON INVESTING IN OTHER MUTUAL FUNDS. Applies to all
Vanguard funds EXCEPT: Capital Value Fund, Developed Markets Index Fund,
Growth Equity Fund, Inflation-Protected Securities Fund, Institutional
Developed Markets Index Fund, Institutional Total Bond Market Index Fund,
Institutional Total Stock Market Index Fund, International Explorer Fund,
all LifeStrategy Funds, Massachusetts Tax-Exempt Fund, Mid-Cap Growth Fund,
STAR Fund, Total International Stock Index Fund, U.S. Value Fund, and the
Diversified Value, Mid-Cap Index, REIT Index, and Short-Term Corporate
Portfolios of the Variable Insurance Fund. These more recently launched
funds are excluded from Proposal 2 because they do not have this
fundamental policy.
3. AUTHORIZE THE FUND'S TRUSTEES TO CHANGE THE TARGET INDEX. Applies to
Extended Market Index Fund, Growth Index Fund, Mid-Cap Index Fund,
Small-Cap Growth Index Fund, Small-Cap Index Fund, Small-Cap Value Index
Fund, Total Stock Market Index Fund, and Value Index Fund.
4. RECLASSIFY THE FUND AS NONDIVERSIFIED. Applies to 500 Index Fund, Balanced
Index Fund, Emerging Markets Stock Index Fund, European Stock Index Fund,
Extended Market Index Fund, Institutional Index Fund, Institutional Total
Stock Market Index Fund, Mid-Cap Index Fund, Pacific Stock Index Fund, REIT
Index Fund, Small-Cap Growth Index Fund, Small-Cap Index Fund, Small-Cap
Value Index Fund, the Tax-Managed Funds, Total Stock Market Index Fund,
Value Index Fund, and the Equity Index, Mid-Cap Index, and REIT Index
Portfolios of the Variable Insurance Fund.
5. CHANGE THE FUND'S INDUSTRY CONCENTRATION POLICY. Applies to Prime Money
Market Fund and the Money Market Portfolio of the Variable Insurance Fund.
6. CHANGE THE FUND'S POLICY ON BORROWING MONEY. Applies to Asset Allocation
Fund, Balanced Index Fund, all Bond Index Funds, GNMA Fund, High-Yield
Corporate Fund, High-Yield Tax-Exempt Fund, Inflation-Protected Securities
Fund, Institutional Total Bond Market Index Fund, Insured Long-Term
Tax-Exempt Fund, Intermediate-Term Corporate Fund, Intermediate-Term
Tax-Exempt Fund, Intermediate-Term Treasury Fund, Limited-Term Tax-Exempt
Fund, Long-Term Corporate Fund, Long-Term Tax-Exempt Fund, Long-Term
Treasury Fund, Short-Term Corporate Fund, Short-Term Federal Fund,
Short-Term Tax-Exempt Fund, Short-Term Treasury Fund, all State Tax-Exempt
Funds, Tax-Exempt Money Market Fund, Tax-Managed Balanced Fund, Wellesley
Income Fund, Wellington Fund, and the Balanced, High-Yield Bond, Short-Term
Corporate, and Total Bond Market Index Portfolios of the Variable Insurance
Fund.
7A. CHANGE THE UTILITIES INCOME FUND'S INVESTMENT OBJECTIVE. Applies to
Utilities Income Fund.
7B. CHANGE THE UTILITIES INCOME FUND'S CONCENTRATION IN UTILITIES STOCKS.
Applies to Utilities Income Fund.
2
PART II PROPOSAL DETAILS
PROPOSAL 1--ELECT TRUSTEES FOR EACH FUND
================================================================================
This proposal applies to all Vanguard funds(1). We are asking shareholders of
each Vanguard fund to elect a board of trustees. The seven persons listed below
have been nominated for election as Vanguard fund trustees. Ms. Heisen and
Messrs. Brennan, Ellis, Rankin, and Wilson currently serve as trustees for all
109 Vanguard funds and are also nominees for trustee for all funds. Mr. Gupta
currently serves as trustee for 87 Vanguard funds, but is a nominee for all
funds. Dr. Malkiel currently serves as trustee of, and is a nominee for, 107
Vanguard funds. Each nominee also serves as a director of The Vanguard Group,
Inc., and each has consented to continue serving as a trustee for the funds if
elected by shareholders. The mailing address of the Vanguard funds' trustees and
officers is P.O. Box 876, Valley Forge, PA 19482.
================================================================================
NOMINEES PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
INTERESTED TRUSTEE
JOHN J. BRENNAN(2) Chairman of the Board, Chief Executive Officer, and
Born 1954 Director/Trustee of The Vanguard Group, Inc., and
Trustee since May 1987 of each of the investment companies served by The
Vanguard Group, Inc.
INDEPENDENT TRUSTEES
CHARLES D. ELLIS(3) The Partners of '63 (pro bono ventures in
Born 1937 education); Senior Adviser to Greenwich Associates
Trustee since January 2001 (international business-strategy consulting);
Successor Trustee of Yale University; Overseer
of the Stern School of Business at New York
University; Trustee of the Whitehead
Institute for Biomedical Research.
RAJIV L. GUPTA(4) Chairman and Chief Executive Officer (since October
Born 1945 1999), Vice Chairman (January-September 1999),
Trustee since December 2001 and Vice President (prior to September 1999)
of Rohm and Haas Co.(chemicals); Director of
Technitrol, Inc. (electronic components), and
Agere Systems (communications components); Board
Member of the American Chemistry Council; Trustee
of Drexel University.
JOANN HEFFERNAN HEISEN Vice President, Chief Information Officer, and
Born 1950 Member of the Executive Committee of Johnson &
Trustee since July 1998 Johnson (pharmaceuticals/consumer products);
Director of the Medical Center at Princeton and
Women's Research and Education Institute.
BURTON G. MALKIEL(1) Chemical Bank Chairman's Professor of Economics,
Born 1932 Princeton University; Director of Vanguard
Trustee since May 1977 Investment Series plc (Irish investment fund)
(since November 2001), Vanguard Group (Ireland)
Limited (Irish investment management firm)
(since November 2001), Prudential Insurance Co.
of America, BKF Capital (investment
management), The Jeffrey Co. (holding company),
and NeuVis, Inc.(software company).
3
ALFRED M. RANKIN, JR. Chairman, President, Chief Executive Officer,
Born 1941 and Director of NACCO Industries, Inc. (forklift
Trustee since January 1993 trucks/housewares/ lignite); Director of Goodrich
Corporation (industrial products/aircraft systems
and services); Director of the Standard Products
Company (supplier for automotive industry)
until 1998.
J. Lawrence Wilson Retired Chairman and Chief Executive Officer of
Born 1936 Rohm and Haas Co. (chemicals); Director of Cummins
Trustee since April 1985 Inc.(diesel engines), The Mead Corp. (paper
products), and AmerisourceBergen Corp.
(pharmaceutical distribution); Trustee of
Vanderbilt University.
- ------------------------------------------------
1 Dr. Malkiel is not a trustee or nominee for Vanguard Equity Income Fund or
Vanguard Growth Equity Fund.
2 Mr. Brennan is considered an "interested person" of each Vanguard fund
because he holds the position of chief executive officer in addition to
serving as trustee.
3 Mr. Ellis is a Senior Adviser to Greenwich Associates, a firm that consults
with financial services organizations around the world on business
strategy. For the last two recently completed fiscal years ending August
31, 2001, Vanguard has paid Greenwich subscription fees amounting to less
than $275,000 for research-based consulting services. Vanguard's
subscription rates are similar to those of other subscribers.
4 Mr. Gupta is not currently a trustee for Vanguard Equity Income Fund,
Vanguard Growth Equity Fund, the Vanguard Municipal Bond Funds, or the
Vanguard State Tax-Exempt Funds.
WHY ARE FUND SHAREHOLDERS BEING ASKED TO ELECT TRUSTEES?
Federal law requires that shareholders elect at least one-half of a fund's board
of trustees. Four of the seven current trustees (Messrs. Brennan, Rankin, and
Wilson and Dr. Malkiel) were elected by shareholders through earlier proxies.
However, three of the current trustees (Ms. Heisen and Messrs. Ellis and Gupta)
were nominated by each board's independent nominating committee and elected by
each fund's full board, but were not elected by shareholders. In light of the
recent retirement of two long-serving elected trustees (Bruce K. MacLaury and
James O. Welch, Jr.) at the end of 2001, now is an appropriate time to hold an
election.
HOW MANY OF THE NOMINEES WILL BE "INDEPENDENT" TRUSTEES IF ELECTED?
Six of the seven nominees--all but Mr. Brennan--will be independent trustees if
elected by shareholders. Independent trustees have no affiliation with Vanguard
or the funds they oversee, apart from any personal investments they choose to
make as private individuals in the funds. Independent trustees play a critical
role in overseeing fund operations and representing the interests of each fund's
shareholders.
DOES EACH VANGUARD FUND HAVE A SEPARATE BOARD OF TRUSTEES?
Not necessarily. For organization purposes, the Vanguard funds are grouped into
35 separate trusts. Each of these trusts is made up of one or more Vanguard
funds--which are sometimes called "series" of the trust--that share the same
board of trustees and therefore elect their trustees on a joint basis. Part V of
this booklet includes an alphabetical list of Vanguard funds, which specifies
the trust to which each fund belongs and provides other details about the funds.
4
WHY DO THE BOARDS OF ALL VANGUARD FUNDS HAVE COMMON TRUSTEES?
There are important benefits in having the board of each fund include trustees
who serve on the boards of the other Vanguard funds. Service on multiple fund
boards gives the trustees greater familiarity with operations that are common to
all Vanguard funds, and permits the trustees to address common issues on a
knowledgeable and consistent basis. This approach also allows the Vanguard funds
to avoid substantial additional costs and administrative burdens. That said, the
trustees recognize that, while there are many areas of common interest among the
funds, they must exercise their responsibilities on a fund-by-fund basis at all
times.
HOW LONG WILL EACH TRUSTEE SERVE IF ELECTED?
If elected, each trustee will serve until he or she resigns, retires, or is
removed from the board as provided in the fund's governing documents. A trustee
may be removed from the board by a shareholder vote representing two-thirds of
the total net asset value of all fund shares under the same trust. If a nominee
is unable to accept election, or subsequently leaves the board before the next
election, the board of trustees may, in its discretion, select another person to
fill the vacant position.
WHAT ARE THE BOARD'S RESPONSIBILITIES?
The primary responsibility of the board of trustees of each fund is to oversee
the management of the fund for the benefit of shareholders. Each board has a
supermajority of independent trustees who are not "interested persons" of the
funds. As Vanguard's chairman and chief executive officer, Mr. Brennan is the
lone management representative on the funds' boards. The independent trustees
bring a broad range of relevant backgrounds, experiences, and skills to the
boards, particularly in domains critical to the funds and their shareholders.
During 2001, the board of trustees of each fund held nine meetings (six one-day
meetings and three two-day meetings).
In the exercise of their oversight responsibilities, the funds' trustees focus
on matters they determine to be vitally important to fund shareholders. This
includes not only the management and performance of the funds but also the
operating plans and budgets, strategic plans, and composition, performance, and
compensation of Vanguard management.
The business acumen, experience, and objective thinking of the funds'
independent trustees are considered invaluable assets for Vanguard
management and, ultimately, the funds' shareholders. Having management
accountable to a group of independent, highly experienced, and
exceptionally qualified individuals who act solely on behalf of
shareholders makes management more effective.
WHAT ARE THE BOARD'S COMMITTEES?
The board of trustees of each fund has three standing committees composed
exclusively of the Fund's independent trustees.
- - NOMINATING COMMITTEE. This committee is responsible for the nomination of
candidates for election to the board and has the authority to recommend the
removal of any trustee from the board. The committee held two meetings in
2001. Shareholders may send recommendations for nominees as trustee to Mr.
Wilson, chairman of the committee.
5
- - AUDIT COMMITTEE. This committee is responsible for overseeing the
accounting and financial reporting policies, the systems of internal
controls, and the independent audits of the funds. The committee held two
meetings in 2001.
- - Compensation Committee. This committee is responsible for overseeing the
compensation programs established for Vanguard employees, officers, and
trustees (including salary guidelines, merit increases, bonuses, and other
compensation arrangements). The committee held two meetings in 2001.
HOW ARE THE TRUSTEES COMPENSATED?
Each fund (other than the Institutional Index Funds and Vanguard's
funds-of-funds) pays its proportionate share of the independent trustees'
compensation(5).The funds' sole interested trustee--Mr. Brennan--and the funds'
officers receive no compensation from the funds (6).The funds compensate their
independent trustees in three ways:
- - The independent trustees receive an annual fee for their service to the
funds, reduced for any absences from scheduled board meetings.
- - The independent trustees are reimbursed for travel and other expenses that
they incur in attending board meetings.
- - The independent trustees who began service prior to January 1, 2001, are
eligible for retirement benefits they had accrued (plus interest) under a
retirement plan. Those independent trustees who began their service on or
after January 1, 2001, are not eligible to participate in the plan.
TRUSTEE COMPENSATION TABLE. The table on the following pages provides
compensation details for each of the trustees. We list the amounts paid as
compensation and accrued as retirement benefits by each Vanguard fund for each
trustee during the fund's most recent fiscal year. In addition, the table shows
the total accrued retirement benefits for each trustee as of January 1, 2002,
and the total amount of compensation paid to each trustee by all funds during
2001.
- ------------------------
5 The trustees of Vanguard Institutional Index Funds receive no compensation
directly from those funds, but The Vanguard Group, Inc., is responsible for
paying the trustees for their service. The trustees of Vanguard's
funds-of-funds receive no compensation from those funds.
6 All fund officers are compensated by The Vanguard Group, Inc.
TRUSTEE COMPENSATION
INTERESTED TRUSTEE INDEPENDENT
TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NAME OF TRUST BRENNAN ELLIS(a) GUPTA(b) HEISEN MALKIEL RANKIN WILSON
- ------------------------------------------------------------------------------------------------------------------------------------
VANGUARD ADMIRAL FUNDS
- Aggregate Compensation from this Trust None $ 800 None $ 800 $ 804 $ 800 $ 918
- Accrued Pension/Retirement Benefits from this Trust None None None $ 94 $ 82 $ 54 $ 36
VANGUARD BALANCED INDEX FUND
- Aggregate Compensation from this Trust None $ 780 None $ 780 $ 784 $ 780 $ 893
- Accrued Pension/Retirement Benefits from this Trust None None None $ 91 $ 80 $ 53 $ 34
VANGUARD BOND INDEX FUNDS
- Aggregate Compensation from this Trust None $ 3,906 None $ 3,906 $ 3,925 $ 3,906 $ 4,467
- Accrued Pension/Retirement Benefits from this Trust None None None $ 456 $ 399 $ 265 $ 176
VANGUARD CALIFORNIA TAX-FREE FUNDS
- Aggregate Compensation from this Trust None $ 1,129 None $ 1,252 $ 1,257 $ 1,253 $ 1,430
- Accrued Pension/Retirement Benefits from this Trust None None None $ 144 $ 126 $ 83 $ 56
VANGUARD CONVERTIBLE SECURITIES FUND
- Aggregate Compensation from this Trust None $ 66 None $ 73 $ 73 $ 73 $ 82
- Accrued Pension/Retirement Benefits from this Trust None None None $ 8 $ 7 $ 5 $ 4
VANGUARD EXPLORER FUND
- Aggregate Compensation from this Trust None $ 856 None $ 1,055 $ 1,060 $ 1,055 $ 1,207
- Accrued Pension/Retirement Benefits from this Trust None None None $ 120 $ 105 $ 70 $ 47
VANGUARD FENWAY FUNDS
- Aggregate Compensation from this Trust None $ 620 None $ 620 None $ 620 $ 710
- Accrued Pension/Retirement Benefits from this Trust None None None $ 73 None $ 43 $ 27
VANGUARD FIXED INCOME SECURITIES FUNDS
- Aggregate Compensation from this Trust None $ 7,065 None $ 7,065 $ 7,100 $ 7,065 $ 8,084
- Accrued Pension/Retirement Benefits from this Trust None None None $ 826 $ 722 $ 479 $ 318
(continued)
VANGUARD FLORIDA TAX-FREE FUNDS
- Aggregate Compensation from this Trust None $ 178 None $ 197 $ 198 $ 197 $ 226
- Accrued Pension/Retirement Benefits from this Trust None None None $ 23 $ 20 $ 13 $ 9
VANGUARD HORIZON FUNDS
- Aggregate Compensation from this Trust None $ 972 None $ 1,197 $ 1,203 $ 1,197 $ 1,371
- Accrued Pension/Retirement Benefits from this Trust None None None $ 136 $ 119 $ 79 $ 54
VANGUARD INDEX FUNDS
- Aggregate Compensation from this Trust None $27,900 None $27,900 $ 28,038 $27,900 $31,922
- Accrued Pension/Retirement Benefits from this Trust None None None $ 3,261 $ 2,852 $ 1,891 $ 1,259
VANGUARD INTERNATIONAL EQUITY INDEX FUNDS
- Aggregate Compensation from this Trust None $ 1,286 None $ 1,286 $ 1,292 $ 1,286 $ 1,472
- Accrued Pension/Retirement Benefits from this Trust None None None $ 150 $ 131 $ 87 $ 59
VANGUARD MALVERN FUNDS
- Aggregate Compensation from this Trust None $ 1,364 None $ 1,891 $ 1,901 $ 1,891 $ 2,162
- Accrued Pension/Retirement Benefits from this Trust None None None $ 212 $ 186 $ 123 $ 83
VANGUARD MASSACHUSETTS TAX-EXEMPT FUNDS
- Aggregate Compensation from this Trust None $ 40 None $ 45 $ 46 $ 45 $ 52
- Accrued Pension/Retirement Benefits from this Trust None None None $ 6 $ 4 $ 3 $ 2
VANGUARD MONEY MARKET RESERVES
- Aggregate Compensation from this Trust None $ 9,450 None $ 9,450 $ 9,497 $ 9,450 $10,812
- Accrued Pension/Retirement Benefits from this Trust None None None $ 1,104 $ 966 $ 640 $ 428
VANGUARD MORGAN GROWTH FUND
- Aggregate Compensation from this Trust None $ 711 None $ 711 $ 714 $ 711 $ 812
- Accrued Pension/Retirement Benefits from this Trust None None None $ 83 $ 73 $ 48 $ 32
VANGUARD MUNICIPAL BOND FUNDS
- Aggregate Compensation from this Trust None $ 4,890 None $ 6,058 $ 6,085 $ 6,058 $ 6,933
- Accrued Pension/Retirement Benefits from this Trust None None None $ 686 $ 600 $ 398 $ 264
VANGUARD NEW JERSEY TAX-FREE FUNDS
- Aggregate Compensation from this Trust None $ 506 None $ 561 $ 563 $ 561 $ 640
- Accrued Pension/Retirement Benefits from this Trust None None None $ 65 $ 57 $ 37 $ 25
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Mr. Ellis joined each fund's board, effective January 1, 2001.
(b) Mr. Gupta joined the boards of 87 funds, effective December 31, 2001.
(continued)
TRUSTEE COMPENSATION
(continured) INTERESTED TRUSTEE INDEPENDENT
TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
NAME OF TRUST BRENNAN ELLIS(a) GUPTA(b) HEISEN MALKIEL RANKIN WILSON
- ------------------------------------------------------------------------------------------------------------------------------------
VANGUARD NEW YORK TAX-FREE FUNDS
- Aggregate Compensation from this Trust None $ 548 None $ 608 $ 610 $ 608 $ 694
- Accrued Pension/Retirement Benefits from this Trust None None None $ 70 $ 61 $ 40 $ 27
VANGUARD OHIO TAX-FREE FUNDS
- Aggregate Compensation from this Trust None $ 168 None $ 186 $ 187 $ 186 $ 214
- Accrued Pension/Retirement Benefits from this Trust None None None $ 22 $ 19 $ 12 $ 8
VANGUARD PENNSYLVANIA TAX-FREE FUNDS
- Aggregate Compensation from this Trust None $ 782 None $ 867 $ 871 $ 867 $ 991
- Accrued Pension/Retirement Benefits from this Trust None None None $ 100 $ 87 $ 58 $ 38
VANGUARD PRIMECAP FUND
- Aggregate Compensation from this Trust None $ 3,102 None $ 3,102 $ 3,117 $ 3,102 $ 3,549
- Accrued Pension/Retirement Benefits from this Trust None None None $ 131 $ 217 $ 159 $ 168
VANGUARD QUANTITATIVE FUNDS
- Aggregate Compensation from this Trust None $ 1,281 None $ 1,281 $ 1,287 $ 1,281 $ 1,466
- Accrued Pension/Retirement Benefits from this Trust None None None $ 150 $ 131 $ 87 $ 57
VANGUARD SPECIALIZED FUNDS
- Aggregate Compensation from this Trust None $ 3,520 None $ 3,520 $ 3,538 $ 3,520 $ 4,028
- Accrued Pension/Retirement Benefits from this Trust None None None $ 411 $ 360 $ 239 $ 158
VANGUARD TAX-MANAGED FUNDS
- Aggregate Compensation from this Trust None $ 1,082 None $ 1,082 $ 1,087 $ 1,082 $ 1,239
- Accrued Pension/Retirement Benefits from this Trust None None None $ 126 $ 111 $ 73 $ 49
VANGUARD TREASURY FUND
- Aggregate Compensation from this Trust None $ 784 None $ 784 $ 788 $ 784 $ 900
- Accrued Pension/Retirement Benefits from this Trust None None None $ 92 $ 80 $ 53 $ 36
(continued)
VANGUARD TRUSTEES' EQUITY FUND
- Aggregate Compensation from this Trust None $ 139 None $ 139 $ 140 $ 139 $ 158
- Accrued Pension/Retirement Benefits from this Trust None None None $ 16 $ 14 $ 9 $ 8
VANGUARD VARIABLE INSURANCE FUND
(Based on Fiscal Period October 1-December 31, 2001)
- Aggregate Compensation from this Trust None $ 100 None $ 100 $ 101 $ 100 $ 115
- Accrued Pension/Retirement Benefits from this Trust None None None $ 12 $ 10 $ 7 $ 5
VANGUARD WELLESLEY INCOME FUND
- Aggregate Compensation from this Trust None $ 962 None $ 962 $ 967 $ 962 $ 1,100
- Accrued Pension/Retirement Benefits from this Trust None None None $ 112 $ 98 $ 65 $ 44
Vanguard Wellington Fund
- Aggregate Compensation from this Trust None $ 4,310 None $ 4,767 $ 4,790 $ 4,767 $ 5,447
- Accrued Pension/Retirement Benefits from this Trust None None None $ 550 $ 481 $ 319 $ 211
VANGUARD WHITEHALL FUNDS
- Aggregate Compensation from this Trust None $ 81 None $ 100 $ 100 $ 100 $ 100
- Accrued Pension/Retirement Benefits from this Trust None None None $ 11 $ 10 $ 7 $ 4
VANGUARD WINDSOR FUNDS
- Aggregate Compensation from this Trust None $ 6,739 None $ 8,305 $ 8,346 $ 8,305 $ 9,499
- Accrued Pension/Retirement Benefits from this Trust None None None $ 945 $ 827 $ 548 $ 364
VANGUARD WORLD FUND
- Aggregate Compensation from this Trust None $ 2,997 None $ 6,477 $ 6,508 $ 6,477 $ 7,408
- Accrued Pension/Retirement Benefits from this Trust None None None $ 254 $ 420 $ 308 $ 324
ALL VANGUARD FUNDS
- Aggregate Compensation from all Vanguard Funds(c) None $104,000 None $104,000 $ 104,000 $ 104,000 $ 119,000
- Total Accrued Retirement Benefit at January 1, 2002 None None None $28,015 $ 97,922 $51,603 $72,873
- -----------------------------------------------------------------------------------------------------------------------------------
Notes:
(a) Mr. Ellis joined each fund's board, effective January 1, 2001.
(b) Mr. Gupta joined the boards of 87 funds, effective December 31, 2001.
(c) These amounts reflect the total compensation paid to each trustee for his
or her services to 109 funds (107 in the case of Dr. Malkiel) for the 2001
calendar year, and therefore may not equal the sum of the amounts shown in
the table, which reflect compensation for each fund's recently completed
fiscal year.
10
TRUSTEES' OWNERSHIP OF FUND SHARES: The trustees invest in the Vanguard funds
based on their investment needs. Please see Part V of the proxy statement,
beginning on page 26, for information on the dollar range of fund shares owned
by each trustee.
FUND OFFICERS. All 109 Vanguard funds employ their officers on a shared basis.
Officers are considered "interested persons" of the funds. In addition to Mr.
Brennan, they are as follows:
R. GREGORY BARTON Managing Director and General Counsel of The Vanguard
Born 1951 Group, Inc. (since September 1997); Secretary of The
Fund Officer since Vanguard Group, Inc., and of each of the investment
June 2001 companies served by The Vanguard Group (since
June 2001); Principal of The Vanguard Group
(since March 1982).
Thomas J. Higgins Principal of The Vanguard Group, Inc. (since July
Born 1957 1989); Treasurer of each of the investment
Fund Officer since companies served by The Vanguard Group (since
July 1998 July 1998).
EACH FUND'S BOARD OF TRUSTEES RECOMMENDS THAT
YOU VOTE "FOR" EACH OF THE NOMINEES.
- --------------------
PROPOSAL 2--CHANGE CERTAIN FUNDS' POLICY ON INVESTING IN OTHER MUTUAL FUNDS
================================================================================
This proposal applies to all Vanguard funds EXCEPT Capital Value Fund, Developed
Markets Index Fund, Growth Equity Fund, Inflation-Protected Securities Fund,
Institutional Developed Markets Index Fund, Institutional Total Bond Market
Index Fund, Institutional Total Stock Market Index Fund, International Explorer
Fund, all LifeStrategy Funds, Massachusetts Tax-Exempt Fund, Mid-Cap Growth
Fund, STAR Fund, Total International Stock Index Fund, U.S. Value Fund, and the
Diversified Value, Mid-Cap Index, REIT Index, and Short-Term Corporate
Portfolios of the Variable Insurance Fund.
================================================================================
We propose to change the policy of each Vanguard fund (excluding the funds noted
above, which do not have this fundamental policy) on investing in other mutual
funds. The main benefit of the proposed change is that it would enable the funds
to invest their cash reserves in a greater number of securities, and achieve
modestly higher returns on their cash reserves. (As used here, "cash reserves"
primarily refers to cash received too late in the day to be invested in an
optimal way and to other amounts that may be held by certain funds for temporary
purposes or as collateral for securities loans.) Under the revised policy, the
funds would be able to invest cash reserves in money market funds and short-term
bond funds created by Vanguard especially for this purpose. This program would
be similar to the cash management programs operated by several other large
mutual fund complexes.
11
WHY CHANGE THE CURRENT POLICY?
The current policy prohibits the funds from investing in other "investment
companies" (a legal term that refers primarily to mutual funds) except through a
merger, consolidation, or acquisition of assets, or within certain limits
specified by the federal statute that regulates mutual funds. As a practical
matter, these statutory limits prevent the funds from investing their cash
reserves in other mutual funds. At present, the policy is "fundamental," meaning
that it can be changed only by shareholder vote.
HOW DO THE FUNDS INVEST THEIR CASH RESERVES NOW?
Currently, most of the funds pool their cash reserves each business day to
invest jointly in overnight repurchase agreements. This pooled arrangement,
which operates on the basis of a Securities and Exchange Commission (SEC)
exemption, gives the funds access to better rates than would be available if
they bought smaller repurchase agreements separately. However, the current
arrangement carries three significant disadvantages. First, returns from
repurchase agreements are limited in comparison with returns from other
low-risk, short-term investments. Second, a fund that receives cash very late in
the day may miss the opportunity to invest it in that day's pool. And third,
Vanguard's tax-exempt funds cannot participate in the pool because the income
from repurchase agreements is taxable.
HOW WOULD THE NEW CASH MANAGEMENT PROGRAM WORK?
Under the new cash management program, each fund would invest its cash reserves
in one or more new funds created by Vanguard especially for this purpose. A
range of dedicated funds--all short-term and low-risk in nature--would be made
available, so that each fund could invest its daily cash reserves in the most
appropriate options. (For instance, a tax-exempt fund would invest its cash
reserves so that it would generate only tax-exempt income.) In this way, the
funds would gain exposure to a wider selection of short-term investments--not
just repurchase agreements--without losing the economies produced by investing
cash on a pooled basis with other funds. The funds also would gain exposure to
instruments that should provide a higher rate of return than overnight
repurchase agreements, with no appreciable increase in risk to shareholders.
The cost of operating the new cash management funds is expected to be
approximately 0.03% to 0.06% of net assets (3 to 6 basis points), which is
comparable to the cost of operating the cash pools currently used to manage the
Vanguard funds' cash. There will be no layering of fees with the new cash
management funds because Vanguard will operate the funds at cost.
Before implementing the new cash management program, Vanguard will need
shareholder approval of this proposal and SEC approval of Vanguard's request for
an exemption from certain legal provisions. The SEC has previously approved the
same type of program for other mutual fund companies; however, there is no
assurance that the SEC will issue an order approving Vanguard's request. The
agency approves such programs only after determining that they are in the public
interest and consistent with the protection of investors.
12
WHAT IS THE PROPOSED POLICY?
The proposed policy reads as follows: The fund may invest in other investment
companies to the extent permitted by applicable law or SEC order. As proposed,
the new policy would be "nonfundamental," meaning that each fund's board of
trustees would have the flexibility to amend it further in shareholders' best
interests, without the expense and delay of a future shareholder vote. Any
future revision to the policy would have to conform to a fund's investment
objective and could not alter the basic nature of the fund.
EACH FUND'S BOARD OF TRUSTEES RECOMMENDS THAT
YOU VOTE "FOR" THIS PROPOSAL.
- -----------------
PROPOSAL 3--AUTHORIZE THE TRUSTEES OF CERTAIN INDEX FUNDS TO CHANGE TARGET
INDEXES
================================================================================
This proposal applies to Extended Market Index Fund, Growth Index Fund, Mid-Cap
Index Fund, Small-Cap Growth Index Fund, Small-Cap Index Fund, Small-Cap Value
Index Fund, Total Stock Market Index Fund, and Value Index Fund.
================================================================================
We want to adopt a policy that authorizes the trustees of each of the above
index funds to change the target index used by the fund if the trustees
determine that doing so would be in shareholders' best interests. This policy
already exists for most Vanguard index funds, including Vanguard's balanced,
bond, and international stock index funds. Because the funds subject to this
proposal do not explicitly have this policy, their trustees would not currently
act to change a target index prior to receiving shareholder approval. The policy
would allow the trustees to seek out new indexes that do a better job of
tracking the market segment targeted by each fund's investment objective. In
addition, this policy would allow the trustees to take prompt corrective action
if a fund's existing index were to begin experiencing difficulties in tracking
its targeted market segment. The new policy would not apply to the 500 Index
Fund or the Institutional Index Fund. These two funds target the Standard &
Poor's 500 Index, a broad-based index that enjoys considerable market
recognition.
WOULD THERE BE A LIMIT ON THE TRUSTEES' AUTHORITY TO CHANGE TARGET INDEXES?
Yes. The trustees' authority to change target indexes would be subject to a key
overriding limitation. Specifically, any new target index would be required to
track the same market segment as the fund's existing index (e.g.,
large-capitalization growth stocks in the case of the Growth Index Fund,
small-cap value stocks in the case of the Small-Cap Value Index Fund). Because
of this limitation, any change in the fund's target index would not result in a
change in the fund's investment objective.
WHY WOULD THE TRUSTEES WANT TO CHANGE A FUND'S TARGET INDEX?
Simply put, all indexes are not created equal. As the sponsor of 29 stock, bond,
and balanced index funds that together comprise over $200 billion in indexed
assets, Vanguard is continually seeking to identify or develop the most
appropriate index for each of the funds. As new indexes are created, we analyze
the quality and integrity of their construction methodology. We also regularly
explore improved construction and rebalancing methods. As explained below, we
believe new indexes under development
13
by Morgan Stanley Capital International, Inc. (MSCI), a well-established index
provider that maintains indexes tracked by Vanguard's international stock index
funds, may offer improved indexing techniques.
WHAT ARE THE CHARACTERISTICS OF AN "IDEAL" INDEX?
Based on Vanguard's indexing experience over the past 25 years, we have formed
certain views about the characteristics of an "ideal" index. We believe, most
importantly, that an index must be judged by how accurately it measures returns
from a designated market segment and not by how its returns compare to those of
other indexes over any particular period of time. No one can predict which index
will outperform another index over any time period. We believe that at least
five aspects of an index provider's construction methodology are critical to
producing a superior index. These are as follows:
- - OBJECTIVITY. In our view, an index should be maintained according to an
objective set of rules that leaves virtually no doubt or ambiguity as to
whether particular stocks warrant inclusion in the index. In the indexing
world, an objective selection process leads to consistency--which, in turn,
enhances the integrity of an index.
- - ADJUSTMENT FOR "FLOAT." We believe that an index should weight its holdings
in a manner that reflects the amount of a stock's "float," or availability,
in the marketplace. Many companies have shares of stock outstanding that
effectively are not available for purchase by the investing public. These
shares often represent closely held positions in a company, or perhaps
cross-holdings of other companies or governments. Including these
unavailable shares in index calculations can produce a distorted picture of
the returns actually attainable by investors.
- - APPROACH TO MARKET CAPITALIZATION. For indexes that focus on companies of a
particular size, we believe that the cutoffs between small-cap, mid-cap,
and large-cap should be defined as overlapping bands rather than fixed
lines. In addition, we believe that these bands separating capitalization
segments should be based on a list of companies ranked by relative size
rather than by the specific dollar amounts of their market capitalization.
- - APPROACH TO "VALUE" VERSUS "GROWTH." Many index providers construct their
value and growth indexes so that each investment style is a perfect
complement of the other. Essentially, growth is defined as "not value," and
value is defined as "not growth." We believe that this is not the best
approach. In the real world, investment managers have their own independent
criteria for determining whether a stock meets their particular investment
style. A growth manager would not rule a stock out solely because it
happened to meet another manager's criteria for value, and vice versa. In
our view, stocks should be analyzed for inclusion in a value index or
growth index in a way that allows for overlapping holdings, and in some
cases, exclusion from both indexes. Similar to capitalization cutoffs,
overlapping bands, rather than a fixed line, should define investment
styles.
- - APPROACH TO REBALANCING. All index providers periodically rebalance their
indexes by adding or dropping stocks to ensure that the indexes continue to
measure their designated market segments. Index funds then quickly adjust
their portfolio holdings to keep in close step with their target indexes,
often incurring large transaction costs and making trades at unattractive
prices. This periodic rush into and out of stocks is counterproductive, and
not at all how investment managers prefer to manage money. We believe that
there are considerable benefits to using a more rational approach to
rebalancing indexes. Gradual and orderly rebalancing more accurately
reflects investment activity in the markets, making the index a better
proxy for its target market. As an added benefit, this approach would
enable index funds to manage their transaction costs from portfolio
adjustments in much the same manner as other investors.
14
WHAT ARE THE BENEFITS OF ENABLING THE TRUSTEES TO ACT QUICKLY ON BEHALF OF
SHAREHOLDERS?
This proposal would allow the funds' trustees to change indexes in shareholders'
best interests without first obtaining shareholder approval. We believe that
this arrangement is preferable for several reasons:
- - TIMING. This policy would enable the trustees to take immediate action
without the considerable delay (at least several months) required to obtain
formal shareholder approval. This ability would be particularly valuable
when time is of the essence in protecting shareholders' interests.
- - COSTS. Along the same lines, this policy would allow the trustees to make a
change without having the fund incur substantial costs in undertaking a
proxy mailing and holding a special shareholder meeting to obtain formal
approval of the change.
- - CONFIDENTIALITY. This policy would allow the trustees to make a change
without tipping off the market about upcoming portfolio changes by the
fund.
HOW WOULD SWITCHING TO A NEW TARGET INDEX AFFECT A FUND'S SHAREHOLDERS?
Any replacement index would track the same market segment as a fund's existing
index, so shareholders should see no change in the overall character of their
investment. Nonetheless, there are certain risks associated with our proposal.
- - TRANSITION ISSUES. Switching to a new index would likely require
adjustments to a fund's portfolio holdings, which could temporarily
increase the fund's transaction costs and cause it to realize capital gains
or losses. In addition, if sophisticated traders and market-timers obtain
advance knowledge of portfolio adjustments to be made by the fund, they
could engage in harmful "front-running"--that is, they could seek to profit
by driving up the prices of stocks to be bought by the fund, or driving
down the prices of stocks to be sold by the fund. For this reason, any
index change would be held in strict confidence by Vanguard until it
actually occurs. Of course, shareholders would be notified of any index
change when it occurs.
- - POTENTIAL FOR DIFFERENT INVESTMENT RETURNS. A fund's new target index could
provide different investment returns (lower or higher) or different return
volatility (greater or less) than its existing index over any period of
time. It is important to understand that the fund's trustees would not base
any decision to change indexes on expectations about future investment
returns. Rather, they would choose a new index on the basis that it will
measure returns from the fund's designated market segment more accurately
than the fund's existing index.
15
ARE THERE ANY INDEX CHANGES CURRENTLY IN THE WORKS?
For some time, Vanguard has been pursuing the development of better indexes in
accordance with the preferred indexing methods described above. MSCI recently
announced that it is creating a full range of new U.S. stock indexes, which we
believe may include many of the improved indexing methods we favor. Vanguard has
entered into a nonexclusive licensing agreement with MSCI to secure the right to
use these new indexes when available, currently expected in early 2003. Assuming
MSCI succeeds in developing what we consider to be clearly superior U.S. stock
indexes, fund management intends to recommend that the trustees adopt these
indexes for the funds.
IF SHAREHOLDERS APPROVE THIS PROPOSAL, WILL THE FUNDS BE REQUIRED TO ADOPT THE
NEW MSCI INDEXES?
No. The funds will adopt the new MSCI indexes only if their trustees determine
that to do so would be in the best interests of shareholders. Another
possibility--although there is no current plan to do so--would be for Vanguard
to develop and maintain its own target indexes for some or all of the funds.
Shareholder approval of this proposal would allow the funds' trustees to adopt
indexes maintained by MSCI, other outside providers, or Vanguard as those
indexes may be developed in the future. Of course, the trustees may also decide
to continue with a fund's existing index.
In sum, we believe that this proposal holds significant benefits for
shareholders. The new policy would allow the funds' trustees to seek out and
adopt indexes that they believe will do a better job of tracking the market
segment targeted by each fund's investment objective. In addition, this policy
would allow the trustees to take prompt corrective action if a fund's existing
index were to begin experiencing difficulties in tracking its targeted market
segment. In short, the proposal would allow the trustees to change a fund's
index in a prompt, efficient, and confidential manner when they believe this to
be in the best interests of shareholders.
EACH FUND'S BOARD OF TRUSTEES RECOMMENDS THAT
YOU VOTE "FOR" THIS PROPOSAL.
- -------------------
PROPOSAL 4--RECLASSIFY CERTAIN INDEX FUNDS AS NONDIVERSIFIED
================================================================================
This proposal applies to 500 Index Fund, Balanced Index Fund, Emerging Markets
Stock Index Fund, European Stock Index Fund, Extended Market Index Fund,
Institutional Index Fund, Institutional Total Stock Market Index Fund, Mid-Cap
Index Fund, Pacific Stock Index Fund, REIT Index Fund, Small-Cap Growth Index
Fund, Small-Cap Index Fund, Small-Cap Value Index Fund, the Tax-Managed Funds,
Total Stock Market Index Fund, Value Index Fund, and the Equity Index, Mid-Cap
Index, and REIT Index Portfolios of the Variable Insurance Fund.
================================================================================
We propose to reclassify each of the above Vanguard stock index funds and stock
index-oriented funds as "nondiversified" under the federal statute that
regulates mutual funds. The purpose of this change is to eliminate a potential
conflict between each fund's indexing objective and the statute's requirements
for "diversified" funds. Specifically, the
16
change to nondiversified status will ensure that a fund can continue to track
its target index even if that index becomes dominated by a small number of
stocks. Shareholders of the Growth Index Fund approved a change to
nondiversified status in 2001 after facing this situation during 1999-2000.
WHAT'S THE DIFFERENCE BETWEEN DIVERSIFIED FUNDS AND NONDIVERSIFIED FUNDS?
By law, mutual funds must classify themselves as either diversified or
nondiversified. The difference is that diversified funds are subject to stricter
percentage limits on the amount of assets that can be invested in any one
company. Specifically, diversified funds are required to satisfy the following
requirements with respect to at least 75% of their total assets: A fund may not
purchase securities of any issuer if, as a result, (i) more than 5% of the
fund's total assets would be invested in securities of a single issuer, or (ii)
more than 10% of the outstanding voting securities of an issuer would be held by
the fund. The Internal Revenue Code also has certain diversification
requirements for funds that are "regulated investment companies," including the
Vanguard funds. For nondiversified funds, the IRS diversification requirements
mean that the limits described above effectively apply to 50% of the fund's
total assets. All Vanguard funds (whether diversified or nondiversified) are
prohibited from investing more than 25% of their total assets in the securities
of a single issuer.
WHAT'S THE POTENTIAL CONFLICT FACED BY INDEX FUNDS CLASSIFIED AS DIVERSIFIED?
Classifying an index or index-oriented fund as diversified has the potential to
prevent the fund from meeting its indexing objective. This is because it's
possible in certain markets for the largest positions in an index to appreciate
significantly relative to the index's other positions, causing the index to
become dominated by a handful of companies. A diversified index fund tied to
such an index would be forced to make a difficult choice: continue to track the
index, in which case the fund would violate its diversification policy; or
comply with its diversification policy, in which case the fund would fail to
track the index. We believe that an index fund should always track its target
index as closely as possible, regardless of market conditions.
WILL AN INDEX FUND MAKE ANY INVESTMENT CHANGES IF RECLASSIFIED AS
NONDIVERSIFIED?
No. It will be "business as usual" for any index fund or index-oriented fund
reclassified as nondiversified. Unless and until changes in the composition of
the fund's target index require otherwise, each fund will continue to meet the
standards that apply to diversified funds. A fund will exceed the investment
limits that apply to diversified funds only as necessary to track its target
index. In such a case, the fund would be considered riskier than a diversified
fund investing in the same types of securities. This is because the performance
of a nondiversified fund can be hurt (or helped) to a greater degree by the
performance of just a few securities.
EACH FUND'S BOARD OF TRUSTEES RECOMMENDS THAT
YOU VOTE "FOR" THIS PROPOSAL.
17
- -------------------------
PROPOSAL 5--CHANGE TWO MONEY MARKET FUNDS' INDUSTRY CONCENTRATION POLICY
================================================================================
This proposal applies to Prime Money Market Fund and the Money Market Portfolio
of the Variable Insurance Fund.
================================================================================
We propose to change the industry concentration policy of the two funds named
above so that each will invest more than 25% of its assets in the financial
services industry. The purpose of this change is to allow the funds to take full
advantage of available money market opportunities.
WHY CHANGE THE CURRENT POLICY?
The current policy prohibits each fund from investing more than 25% of its
assets in any one industry (with an exception for U.S. government-issued or
- -guaranteed securities and certain bank instruments). However, financial
services companies are playing an increasingly important role in the world of
money market securities. Over the past few years, asset-backed securities and
other innovative financing vehicles offered by financial services companies
(including, for example, bank-sponsored asset-backed securities programs and
programs sponsored by the automobile finance industry) have come to attract
money market assets that traditionally were directed to certificates of deposit
and banker's acceptances. Accordingly, financial services companies have become
a key issuer of money market securities. We believe that our funds can take
better advantage of money market opportunities by investing more than 25% of
their assets in financial services companies.
WHAT IS THE PROPOSED POLICY?
The proposed policy reads as follows: The fund may not purchase securities of
any issuer if, as a result, more than 25% of the fund's total assets would be
invested in the securities of companies whose principal business activities are
in the same industry, except that: (i) the fund will invest more than 25% of its
total assets in the financial services industry; and (ii) the fund may invest
more than 25% of its total assets in securities issued or guaranteed by the U.S.
government or its agencies and instrumentalities and in certificates of deposit
or bankers' acceptances of domestic institutions. Consistent with SEC
requirements, the new industry concentration policy would continue to be
"fundamental," meaning that it could be changed further in a substantive way
only by a shareholder vote.
WILL THE FUNDS STILL SEEK TO MAINTAIN A STABLE $1 SHARE PRICE?
Yes. If shareholders approve this proposal, the funds will continue to invest in
compliance with strict industry requirements for money market funds. These
risk-limiting requirements are intended to ensure (but cannot guarantee) that
money market funds will maintain a stable price of $1 per share. By
concentrating their assets in financial services companies, the funds will
assume the risk that negative developments in that sector may adversely affect
18
them. However, we believe that this risk is negligible, given the diversity and
breadth of the financial services sector and the protections afforded by money
market fund regulations.
EACH FUND'S BOARD OF TRUSTEES RECOMMENDS THAT
YOU VOTE "FOR" THIS PROPOSAL.
- -------------------
PROPOSAL 6--CHANGE CERTAIN BOND AND BALANCED FUNDS' POLICY ON BORROWING MONEY
================================================================================
This proposal applies to Asset Allocation Fund, Balanced Index Fund, all Bond
Index Funds, GNMA Fund, High-Yield Corporate Fund, High-Yield Tax-Exempt Fund,
Inflation-Protected Securities Fund, Institutional Total Bond Market Index Fund,
Insured Long-Term Tax-Exempt Fund, Intermediate-Term Corporate Fund,
Intermediate-Term Tax-Exempt Fund, Intermediate-Term Treasury Fund, Limited-Term
Tax-Exempt Fund, Long-Term Corporate Fund, Long-Term Tax-Exempt Fund, Long-Term
Treasury Fund, Short-Term Corporate Fund, Short-Term Federal Fund, Short-Term
Tax-Exempt Fund, Short-Term Treasury Fund, all State Tax-Exempt Funds,
Tax-Exempt Money Market Fund, Tax-Managed Balanced Fund, Wellesley Income Fund,
Wellington Fund, and the Balanced, High-Yield Bond, Short-Term Corporate, and
Total Bond Market Index Portfolios of the Variable Insurance Fund.
================================================================================
We propose to change the borrowing policy of the funds listed above to make it
clear that the funds may take advantage of certain investment opportunities that
do not involve leverage or a change to the fund's objective or risk profile.
WHAT'S THIS PROPOSAL ABOUT?
The current policy is intended to permit certain borrowings, up to 15% of net
assets, and is designed to prevent the funds from running leveraged investment
programs. There is no plan to change the intent of the current policy, which we
believe is quite sound. The current wording of the policy, however, needs to be
modified so that it is clear that the funds may take advantage of certain
investment opportunities that do not involve leverage or a change to the fund's
objective or risk profile.
WHAT'S UNCLEAR ABOUT THE CURRENT POLICY?
Under the current policy, funds may only borrow for "temporary or emergency
purposes," and funds may not make additional investments until they repay
outstanding borrowings. In addition, funds can borrow only through banks,
reverse repurchase agreements, or the Vanguard funds' interfund lending program.
Reading this strictly, as we do, the current policy effectively prevents the
funds from investing in certain types of instruments that may benefit the funds.
For example, these instruments include "mortgage dollar rolls," which provide an
efficient (and at times less expensive) way for funds to invest in the same
types of mortgage-backed securities that they routinely own today. Mortgage
dollar rolls would be used only if consistent with a fund's investment objective
and strategies and would not be used to leverage a fund's assets or change its
risk profile. However, because mortgage dollar rolls could be considered
borrowings, the current policy restricts the funds' ability to take advantage of
the benefits they provide.
19
WHAT IS THE PROPOSED POLICY?
The proposed policy reads as follows: A fund may not borrow money in excess of
15% of its net assets, and any borrowings by a fund must comply with all
applicable regulatory requirements. Consistent with SEC requirements, the new
borrowing policy would continue to be "fundamental," meaning that it could be
changed further in a substantive way only by a shareholder vote.
WILL THIS CHANGE MAKE THE FUND MORE RISKY?
While there are risks associated with investing in mortgage dollar rolls,
including credit risk associated with counterparties, a fund would use these
instruments only in a manner consistent with its existing risk profile,
investment objective, and investment strategies. The proceeds of the borrowings
would be invested in high-quality, short-term fixed income securities, resulting
in little or no leverage of the fund's portfolio. The fund would maintain
separate accounts to "cover" or collateralize any borrowings as required by the
securities laws and the SEC. A fund's total borrowings would be limited to 15%
of its net assets (which is less than one-half the SEC limit of 331/3% of a
fund's total assets).
EACH FUND'S BOARD OF TRUSTEES RECOMMENDS
THAT YOU VOTE "FOR" THIS PROPOSAL.
- --------------------------
PROPOSAL 7A--CHANGE THE UTILITIES INCOME FUND'S INVESTMENT OBJECTIVE
PROPOSAL 7B--CHANGE THE UTILITIES INCOME FUND'S CONCENTRATION IN UTILITIES
STOCKS
================================================================================
These proposals apply to Utilities Income Fund. Each of these proposals is
contingent on shareholder approval of the other, so neither proposal will be
implemented unless shareholders approve both. The fund's board of trustees made
these proposals contingent because it would be impractical to implement one
without the other.
================================================================================
We want to broaden the Utilities Income Fund's focus beyond utility stocks so as
to provide the fund with the ability to invest in dividend-paying companies
across a range of industries. In order to change the fund's focus, we propose
changing the fund's (A) investment objective and (B) industry concentration
policy. If shareholders approve these proposals, the fund will be renamed
Vanguard(R) Dividend Growth Fund and will begin investing in stocks of companies
from different industries.
PROPOSAL 7A: CHANGING THE FUND'S INVESTMENT OBJECTIVE
We propose changing the fund's investment objective to make it compatible with
investments in stocks across a diverse group of industries.
HOW WOULD THE FUND'S INVESTMENT OBJECTIVE CHANGE?
The fund's current investment objective is to provide a high level of current
income and, secondarily, to provide moderate long-term growth of capital and
income. We propose
20
to replace this with the objective to provide above-average
income and, secondarily, to provide long-term growth of capital and income. The
new investment objective would not be "fundamental," meaning that it could be
changed in the future by the fund's board of trustees.
PROPOSAL 7B: CHANGING THE FUND'S CONCENTRATION IN UTILITIES STOCKS
The fund's current industry concentration policy requires the fund to invest
more than 25% of its assets in the utilities industry. We propose changing the
policy to state that the fund will concentrate no more than 25% of its assets in
any single industry. The purpose is to broaden the fund's focus from utilities
stocks to stocks across different industries.
WHY CHANGE THE FUND'S OBJECTIVE AND ITS FOCUS ON UTILITIES STOCKS?
Currently, the fund invests at least 80% of its assets in common stocks of
utility companies. In the past, the fund's focus on utilities stocks was
considered a conservative investment policy, because utility companies were
closely regulated and tended to have relatively consistent, modestly increasing
earnings, as well as the capacity to pay stable or increasing dividends.
Investing in these securities was thus a good way for the fund to meet its
objective of providing a high level of current income, and secondarily, moderate
long-term growth of capital and income. However, times have changed. The
deregulation of the various utility sectors, including electricity producers and
distributors, natural gas transmission companies, and telephone companies, has
led to far less stability in earnings and an overall decline in dividend
payments. Broadening the fund's focus beyond utility companies will allow its
adviser to invest across a diversified spectrum of companies whose stocks will
typically offer reasonable dividend income and prospects for attractive earnings
and dividend growth. Increasing the fund's industry diversification should also
lower the fund's risk.
HOW WILL THESE CHANGES AFFECT SHAREHOLDERS?
The changes will affect shareholders primarily in two ways. First, broadening
the fund's focus beyond utility companies should decrease the fund's overall
risk for shareholders. Currently, the fund is subject to "industry concentration
risk," which is the chance that problems affecting the utility industry will
cause the fund to decrease in value. If the fund is able to invest broadly in
other industries, it will no longer be subject to industry concentration risk.
Second, while decreasing its utility stock holdings, the fund could realize
capital gains, which would be paid out as taxable distributions. If this
proposal is approved, the fund's adviser expects to change, in an orderly
manner, approximately 95% of the current portfolio. However, even with such
significant portfolio turnover, it is expected that tax losses carried forward
by the fund would be sufficient to offset any gains in the transition. The
fund's adviser will seek to minimize transaction costs for the fund during the
transition, which may take several weeks, depending on market conditions.
21
HOW WILL THE FUND'S INVESTMENT ADVISER MANAGE THE FUND?
Wellington Management Company, llp ("Wellington Management"), will continue to
serve as the fund's investment adviser. Wellington Management primarily will
select securities from a diverse group of industries, focusing on companies that
have a history of paying dividends, have not decreased their dividends over
time, or have attractive prospects for increased dividends in the future.
Securities will be selected based on a variety of factors, such as a company's
consistent ability to maintain and increase dividends over time while
maintaining strong levels of profitability.
THE FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" BOTH OF THESE
PROPOSALS.
22
PART III INFORMATION ON THE FUNDS' INDEPENDENT ACCOUNTANTS
================================================================================
This section provides information about the funds' independent accountants.
================================================================================
SELECTION OF PRICEWATERHOUSECOOPERS AS INDEPENDENT ACCOUNTANTS. The independent
trustees of each Vanguard fund have selected PricewaterhouseCoopers LLP (PwC) as
independent accountants to audit and certify the funds' financial statements.
Representatives of PwC will be present at the shareholder meeting and will be
given the opportunity to make a statement if they so choose.
In addition to serving as independent accountants, PwC has provided limited
nonaudit services (primarily tax and business advisory services) to both the
Vanguard funds and The Vanguard Group, Inc. The independent trustees carefully
considered these nonaudit services when evaluating PwC's independence for
purposes of its selection as the funds' independent accountants. In a letter to
the funds' audit committee dated June 25, 2002, PwC confirmed its status as
independent accountants with respect to the Vanguard funds within the meaning of
the federal securities laws.
PWC AUDIT REPORTS. PwC's audit report for each Vanguard fund's most recent
fiscal year did not contain any adverse opinions or disclaimers of opinion, nor
did PwC qualify or modify such reports as to uncertainty, audit scope, or
accounting principles. Further, there were no disagreements between any of the
Vanguard funds and PwC in three key areas: (i) accounting principles and
practices, (ii) financial statement disclosures, or (iii) audit scope and
procedures--which, if not resolved to PwC's satisfaction, would have caused the
accountants to reference the matter in their audit reports.
23
FUND-RELATED AUDIT FEES PAID TO PWC. The Vanguard funds are organized under 35
separate trusts, each of which paid PwC the approximate amount shown in the
table below as audit fees for the trust's most recently ended fiscal year.
Please refer to Part V for the name of the trust to which each Vanguard fund
belongs.
-----------------------------------------------------------------------
TRUST AUDIT FEES
-----------------------------------------------------------------------
Vanguard Admiral Funds $ 9,000
Vanguard Balanced Index Fund 12,500
Vanguard Bond Index Funds 48,000
Vanguard California Tax-Free Funds 33,000
Vanguard Convertible Securities Fund 12,500
Vanguard Explorer Fund 12,500
Vanguard Fenway Funds 25,000
Vanguard Fixed Income Securities Funds 120,000
Vanguard Florida Tax-Free Funds 12,000
Vanguard Horizon Funds 40,000
Vanguard Index Funds 112,500
Vanguard Institutional Index Funds 25,000
Vanguard International Equity Index Funds 45,000
Vanguard Malvern Funds 25,000
Vanguard Massachusetts Tax-Exempt Funds 12,000
Vanguard Money Market Reserves 18,000
Vanguard Morgan Growth Fund 12,500
Vanguard Municipal Bond Funds 81,000
Vanguard New Jersey Tax-Free Funds 21,000
Vanguard New York Tax-Free Funds 21,000
Vanguard Ohio Tax-Free Funds 21,000
Vanguard Pennsylvania Tax-Free Funds 21,000
Vanguard PRIMECAP Fund 12,500
Vanguard Quantitative Funds 12,500
Vanguard Specialized Funds 62,500
Vanguard STAR Funds 81,000
Vanguard Tax-Managed Funds 62,500
Vanguard Treasury Fund 9,000
Vanguard Trustees' Equity Fund 15,000
Vanguard Variable Insurance Fund 320,000
Vanguard Wellesley Income Fund $ 12,500
Vanguard Wellington Fund 12,500
Vanguard Whitehall Funds 12,500
Vanguard Windsor Funds 25,000
Vanguard World Fund 40,000
-----------------------------------------------------------------------
TOTAL AUDIT FEES $1,417,000
ALL OTHER FEES PAID TO PWC For the year ended June 30, 2002, PwC was paid
approximately $71,000 for all nonaudit services rendered to the Vanguard funds,
including tax compliance services and SEC registration statement procedures. For
that same year, PwC was paid approximately $532,400 for nonaudit services
provided to The Vanguard Group, Inc. and certain of its affiliates. This amount
includes services in connection with Vanguard's benefit plans and statements,
transfer agent systems, tax reporting and documentation, educational training
materials, and other business advisory services. No fees were paid to PwC by any
Vanguard entity for design or implementation of financial information systems.
24
PART IV MORE ON PROXY VOTING AND SHAREHOLDER MEETINGS
================================================================================
This section provides information on a number of topics relating to proxy voting
and shareholder meetings.
================================================================================
VOTES NEEDED TO ELECT TRUSTEES. Shareholders of funds that are part of the same
trust will elect their trustees on a joint basis. (A list of trusts and their
component Vanguard funds is included in Part V of this proxy statement.) For
each trust, the seven nominees (six in the case of Vanguard Fenway Funds)
receiving the highest number of affirmative votes cast at the meeting will be
elected. A nominee will not be elected, however, if more votes are cast against
than for him or her.
VOTES NEEDED TO APPROVE PROPOSALS 2-7. Shareholders of each fund will vote
separately on each proposal applicable to that fund. For a proposal to pass for
a fund, it must be approved by the lesser of (i) shares representing 67% or more
of the fund's net assets voted, so long as shares representing more than 50% of
the fund's net assets are present or represented by proxy; or (ii) shares
representing more than 50% of the fund's net assets.
PROXY SOLICITATION METHODS. The funds will solicit shareholder proxies in a
variety of ways. All shareholders who are entitled to vote will receive these
proxy materials either by mail or electronically (assuming that applicable
requirements are met). In addition, Vanguard employees and officers may solicit
shareholder proxies in person, by telephone, by mail, or over the Internet.
PROXY SOLICITATION COSTS. Each fund will pay all costs of soliciting proxies
from its shareholders, including costs relating to the printing, mailing, and
tabulation of proxies. Those costs shared by the funds will be paid by The
Vanguard Group, Inc. Each fund within The Vanguard Group pays its share of
Vanguard's total expenses under procedures approved by the fund's board of
trustees. By voting immediately, you can help your fund avoid the considerable
expense of a second proxy solicitation.
QUORUM. Each fund must achieve a quorum in order for the shareholder meeting to
go forward. This means that a majority of a fund's shares must be represented at
the meeting, either in person or by proxy. All returned proxies count toward a
quorum, regardless of how they are voted ("For," "Against," or "Abstain"). The
funds will count abstentions and broker non-votes toward establishing a quorum,
but not toward the approval of any proposals. Therefore, abstentions and broker
non-votes will have the effect of votes cast against the proposals. (A broker
non-vote is a proxy received from a broker who holds fund shares on behalf of an
investor, but who does not have discretionary power to vote the shares on the
investor's behalf, indicating that the broker has not received instructions from
the investor on the matter at issue.)
25
CHANGING YOUR VOTE OR REVOKING YOUR PROXY. Your latest vote is the one that
counts. Therefore, you can change a prior vote simply by voting again--over the
Internet, by toll-free telephone call, by using your proxy card, or by voting in
person at the shareholder meeting.
If you need an additional proxy card, please call 1-800-992-0833 (1-800-523-1188
for participants in a company-sponsored 401(k) or other retirement plan
administered by Vanguard). You can revoke a proxy by writing to the following
address: Melissa Nassar, V26, The Vanguard Group, P.O. Box 2600, Valley Forge,
PA 19482-2600, or in person at the meeting.
Your deadline for changing your vote or revoking your proxy depends on how
you vote or revoke. You may vote by Internet or telephone until 12.00 a.m. on
December 3, 2002. Votes (or letters to revoke your proxy) cast by mail must be
received by the proxy tabulator by the morning of December 3, 2002. You may vote
or revoke your proxy in person on December 3 at the meeting.
SHAREHOLDER PROPOSALS. Any shareholder proposals to be included in the proxy
statement for a fund's next meeting of shareholders must be received by the fund
within a reasonable period of time prior to that meeting. None of the funds
currently plans to hold a meeting of shareholders in 2003.
VOTING RIGHTS. Shareholders are entitled to cast one vote for each dollar of
fund net assets owned on the record date and a fractional vote for each
fractional dollar of net assets owned on that date.
NOMINEE ACCOUNTS. Upon request, the Vanguard funds will reimburse nominees for
their reasonable expenses in forwarding proxy materials to beneficial owners of
the funds' shares. Please submit invoices for our review to: Melissa Nassar,
V26, The Vanguard Group, P.O. Box 2600, Valley Forge, PA 19482-2600.
OTHER MATTERS. At this point, we know of no other business to be brought before
the shareholder meeting. However, if any other matters do come up, we will use
our best judgment to vote on your behalf. If you object to our voting other
matters on your behalf, please tell us so in writing before the meeting.
THE VANGUARD GROUP, INC. Except as noted below, each of the Vanguard funds
soliciting proxies is a member of The Vanguard Group, Inc. ("Vanguard").
Vanguard is owned jointly by the funds it oversees (and therefore indirectly by
the shareholders of those funds). Vanguard provides the funds--more than 95
distinct investment portfolios--with their corporate management, administrative,
and distribution services on an at-cost basis.
Funds organized under Vanguard Institutional Index Funds and Vanguard STAR
Funds are not members of The Vanguard Group, although they are administered by
and pay fees to The Vanguard Group for management, advisory, marketing,
accounting, transfer agency, and other services.
26
PART V FUND AND INVESTMENT ADVISER INFORMATION
This section provides information regarding the funds and their investment
advisers.
INVESTMENT ADVISERS: Listed below are the names and addresses of the Vanguard
funds' investment advisers.
ADVISER ADDRESS
- --------------------------------------------------------------------------------
ALLIANCE CAPITAL MANAGEMENT L.P. 1345 Avenue of the Americas,
New York, NY 10105
BARROW, HANLEY, MEWHINNEY & Strauss, Inc. One McKinney Plaza, 3232 McKinney Avenue,
15th Floor, Dallas, TX 75204
CHARTWELL INVESTMENT PARTNERS 1235 Westlakes Drive, Suite 330,
Berwyn, PA 19312
EQUINOX CAPITAL MANAGEMENT, LLC 590 Madison Avenue, 41st Floor,
New York, NY 10022
FRANKLIN PORTFOLIO ASSOCIATES, LLC Two International Place, 22nd Floor,
Boston, MA 02110
GRANAHAN INVESTMENT MANAGEMENT, INC. 275 Wyman Street, Suite 270,
Waltham, MA 02451
GRANTHAM, MAYO, VAN OTTERLOO & Co. LLC 40 Rowes Wharf,
Boston, MA 02110
HANSBERGER GLOBAL INVESTORS, INC. 515 East Las Olas Boulevard, Suite 1300,
Fort Lauderdale, FL 33301
JOHN A. LEVIN & Co., Inc. One Rockefeller Plaza, 19th Floor,
New York, NY 10020
M&G INVESTMENT MANAGEMENT LIMITED Laurence Pountney Hill,
London, EC4H OHH, England
MARATHON ASSET MANAGEMENT LIMITED Orion House, 5 Upper St. Martin's Lane,
London, WC2H 9EA, England
MELLON CAPITAL MANAGEMENT CORPORATION 595 Market Street, Suite 3000,
San Francisco, CA 94105
NEWELL ASSOCIATES 525 University Avenue, Palo Alto, CA 94301
OAKTREE CAPITAL MANAGEMENT, LLC 333 South Grand Avenue, 28th Floor,
Los Angeles, CA 90071
27
ADVISER ADDRESS
- --------------------------------------------------------------------------------
PRIMECAP MANAGEMENT COMPANY 225 South Lake Avenue, Suite 400,
Pasadena, CA 91101
PROVIDENT INVESTMENT COUNSEL, INC. 300 North Lake Avenue,
Pasadena, CA 91101
SANFORD C. BERNSTEIN & Co., LLC 767 Fifth Avenue, New York, NY 10153
SCHRODER INVESTMENT MANAGEMENT
NORTH AMERICA INC. 31 Gresham Street,
London, EC2V 7QA, England
TUKMAN CAPITAL MANAGEMENT, INC. 60 East Sir Francis Drake Boulevard,
Suite 204, Larkspur, CA 94939
TURNER INVESTMENT PARTNERS, INC. 1235 Westlakes Drive, Suite 350,
Berwyn, PA 19312
THE VANGUARD GROUP, INC. P.O. Box 2600, Valley Forge, PA 19482
WELLINGTON MANAGEMENT COMPANY, LLP 75 State Street, Boston, MA 02109
VANGUARD FUND INFORMATION
This section provides certain required information for each of the Vanguard(R)
funds. The funds appear in alphabetical order, and all information presented is
as of June 30, 2002. The year in parentheses is the fund's year of inception.
Among other things, we list the trustees' beneficial ownership of each fund's
shares based on certain dollar ranges. All trustees allocate personal assets
among the Vanguard funds according to their own investment needs. In the
aggregate, each trustee owns over $100,000 in shares of all Vanguard funds. As a
group, each fund's trustees and officers own less than 1% of the outstanding
shares of that fund. As we explained earlier in this statement, Mr. Brennan is
the only interested trustee of the Vanguard funds. All other trustees are
independent of Vanguard and the Vanguard funds.
VANGUARD(R)500 INDEX FUND (1976)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $76,997,630,057 and 843,099,074 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; GUPTA, over $100,000; MALKIEL, $50,001-$100,000; RANKIN,
over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
A
VANGUARD(R)ADMIRAL(TM)TREASURY MONEY MARKET FUND (1992)
- A series of Vanguard Admiral Funds(R).
- Advised by The Vanguard Group, Inc.
- Net assets of $9,595,397,961 and 9,594,949,105 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. FedEx Corporation Retirement Savings Plan, Memphis, Tenn.,
owns approximately 7.0%.
VANGUARD(R)ASSET ALLOCATION FUND (1988)
- A series of Vanguard Malvern Funds.
- Advised by Mellon Capital Management Corporation.
- Net assets of $7,876,613,759 and 379,945,871 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
29
B
VANGUARD(R)BALANCED INDEX FUND (1992)
- A series of Vanguard Balanced Index Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $4,319,343,628 and 260,633,436 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
C
VANGUARD(R)CALIFORNIA INTERMEDIATE-TERM TAX-EXEMPT FUND (1994)
- A series of Vanguard California Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,378,125,210 and 212,154,109 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)CALIFORNIA LONG-TERM TAX-EXEMPT FUND (1986)
- A series of Vanguard California Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,077,045,558 and 177,466,040 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)CALIFORNIA TAX-EXEMPT MONEY MARKET FUND (1987)
- A series of Vanguard California Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,209,174,915 and 3,209,065,639 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)CALVERT SOCIAL INDEX FUND (2000)
- A series of Vanguard World Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $94,755,463 and 14,655,069 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund:
1. Preferred Professional Insurance Co., Omaha, Neb., owns
approximately 6.2%.
30
Vanguard(R)Capital Opportunity Fund (1995)
- A series of Vanguard Horizon Funds(R).
- Advised by PRIMECAP Management Company.
- Net assets of $4,182,264,634 and 213,719,228 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; HEISEN, over $100,000; MALKIEL, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
Vanguard(R)Capital Value Fund (2001)
- A series of Vanguard Malvern Funds.
- Advised by Wellington Management Company, LLP
- Net assets of $232,214,597 and 28,634,748 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN,
$10,001-$50,000; WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
Vanguard(R)Convertible Securities Fund (1986)
- A series of Vanguard Convertible Securities Fund.
- Advised by Oaktree Capital Management, LLC.
- Net assets of $280,807,365 and 25,884,603 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
D
Vanguard(R) Developed Markets Index Fund (2000)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $300,385,602 and 43,763,499 outstanding shares.
- Trustees who beneficially own shares of this fund: GUPTA, over
$100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. ChevronTexaco Employee Savings Investment Plan, San Ramon,
Calif., owns approximately 7.9%.
2. Rohm and Haas Company Employee Stock Ownership and Savings
Plan, Philadelphia, Pa., owns approximately 7.5%.
31
E
VANGUARD(R)EMERGING MARKETS STOCK INDEX FUND (1994)
- A series of Vanguard International Equity Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,024,618,822 and 120,992,609 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. Vanguard Total International Stock Index Fund, Valley Forge,
Pa., owns approximately 26.5%.
VANGUARD(R)ENERGY FUND (1984)
- A series of Vanguard Specialized Funds.
- Advised by Wellington
Management Company, LLP.
- Net assets of $1,543,405,943 and 555,666,510 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)EQUITY INCOME FUND (1988)
- A series of Vanguard Fenway Funds.
- Advised by Newell Associates; John A. Levin & Co., Inc.; Wellington
Management Company, LLP; and The Vanguard Group, Inc.
- Net assets of $2,476,993,802 and 109,217,255 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $1-$10,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)EUROPEAN STOCK INDEX FUND (1990)
- A series of Vanguard International Equity Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $5,210,185,871 and 256,268,445 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; ELLIS, over $100,000; MALKIEL, over $100,000; WILSON,
over $100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. Vanguard Total International Stock Index Fund, Valley Forge,
Pa., owns approximately 40.6%.
32
VANGUARD(R)EXPLORER(TM)FUND (1967)
- A series of Vanguard Explorer Fund.
- Advised by Chartwell Investment Partners; Granahan Investment
Management, Inc.; Grantham,Mayo, Van Otterloo & Co. LLC; The Vanguard
Group, Inc.; and Wellington Management Company, LLP.
- Net assets of $4,383,912,021 and 83,910,119 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; GUPTA, $50,001-$100,000; RANKIN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)EXTENDED MARKET INDEX FUND (1987)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $4,422,373,876 and 208,411,863 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $10,001-$50,000; GUPTA,$50,001-$100,000;
RANKIN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
F
VANGUARD(R)FEDERAL MONEY MARKET FUND (1981)
- A series of Vanguard Money Market Reserves.
- Advised by The Vanguard Group, Inc.
- Net assets of $6,777,514,148 and 6,777,591,756 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) FLORIDA LONG-TERM TAX-EXEMPT FUND (1992)
- A series of Vanguard Florida Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,162,734,996 and 99,743,641 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
33
G
VANGUARD(R)GLOBAL EQUITY FUND (1995)
- A series of Vanguard Horizon Funds.
- Advised by Marathon Asset Management Limited.
- Net assets of $244,932,738 and 19,875,537 outstanding shares.
- Trustees who beneficially own shares of this fund: WILSON,
over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)GNMA FUND (1980)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by Wellington Management Company, LLP.
- Net assets of $23,286,379,610 and 2,207,514,893 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
Vanguard(R) Growth and Income Fund (1986)
- A series of Vanguard Quantitative Funds.
- Advised by Franklin Portfolio Associates, LLC.
- Net assets of $6,118,489,569 and 237,296,776 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)GROWTH EQUITY FUND (1992)
- A series of Vanguard Fenway Funds.
- Advised by Turner Investment Partners, Inc.
- Net assets of $615,203,284 and 81,158,283 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)GROWTH INDEX FUND (1992)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $8,326,711,333 and 381,425,503 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
34
H
VANGUARD(R) HEALTH CARE FUND (1984)
- A series of Vanguard Specialized Funds.
- Advised by Wellington Management Company, LLP.
- Net assets of $16,889,201,174 and 177,291,420 outstanding shares.
- Trustees who beneficially own shares of this fund:
HEISEN, $10,001-$50,000; RANKIN,$50,001-$100,000;
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)HIGH-YIELD CORPORATE FUND (1978)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by Wellington Management Company, LLP.
- Net assets of $6,772,418,257 and 1,129,340,137 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; MALKIEL, over $100,000; WILSON, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)HIGH-YIELD TAX-EXEMPT FUND (1978)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,933,052,427 and 369,313,999 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
I
VANGUARD(R)INFLATION-PROTECTED SECURITIES FUND (2000)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,690,196,787 and 151,075,998 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
35
VANGUARD(R)INSTITUTIONAL DEVELOPED MARKETS INDEX FUND (2000)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $279,265,321 and 40,989,194 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Amica Mutual Insurance Company, Lincoln, R.I., owns
approximately 13.4%.
2. Harvard International Investment Partnership, Boston, Mass.,
owns approximately 13.0%.
3. Bost & Co., Pittsburgh, Pa., owns approximately 9.6%.
4. Marshall & Ilsley Trust Co., FBO Cuna Unitized Plans,
Milwaukee, Wis., owns approximately 8.3%.
5. State of Iowa 529 Plan, Des Moines, Iowa, owns approximately
8.1%.
6. Conref & Co., Trustee, FBO Laclede Gas Pension, Milwaukee,
Wis.,owns approximately 6.6%.
VANGUARD(R)INSTITUTIONAL INDEX FUND (1990)
- A series of Vanguard Institutional Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $32,727,340,471 and 361,707,275 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Allfirst Trust Company, Custodian, The City of New York,
Deferred Compensation Plan, C/O FASCorp, Englewood, Colo., owns
approximately 5.3%.
VANGUARD(R)INSTITUTIONAL TOTAL BOND MARKET INDEX FUND (2002)
- A series of Vanguard Institutional Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $429,403,056 and 8,557,870 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. SCIC Holdings LLC, C/O AON Insurance Managers, Burlington,
Vt., owns approximately 43.1%.
2. State of Utah, Land Permanent Trust Fund, Salt Lake City,
Utah, owns approximately 28.5%.
3. MAC & Co., Pittsburgh, Pa., owns approximately 23.4%.
36
VANGUARD(R)INSTITUTIONAL TOTAL STOCK MARKET INDEX FUND (2001)
- A series of Vanguard Institutional Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,271,532,955 and 62,789,692 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Trustees of the University of Pennsylvania (Endowment),
Philadelphia, Pa., owns approximately 28.7%.
2. Citibank NA, RJ Reynolds Capital Investment Plan, New York,
N.Y., owns approximately 23.2%.
3. The Glenmede Trust Co., Trustee, The Pew Memorial Trust,
Philadelphia, Pa., owns approximately 21.7%.
4. Trustees of the University of Pennsylvania (Defined Benefit),
Philadelphia, Pa., owns approximately 7.4%.
VANGUARD(R)INSURED LONG-TERM TAX-EXEMPT FUND (1984)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,812,021,323 and 222,156,096 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)INTERMEDIATE-TERM BOND INDEX FUND (1994)
- A series of Vanguard Bond Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,673,519,687 and 261,372,134 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)INTERMEDIATE-TERM CORPORATE FUND (1993)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,213,697,366 and 331,288,806 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
37
VANGUARD(R) INTERMEDIATE-TERM TAX-EXEMPT FUND (1977)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $11,254,717,662 and 830,297,655 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
Vanguard(R)Intermediate-Term Treasury Fund (1991)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,883,340,864 and 345,241,991 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)INTERNATIONAL EXPLORER(TM)FUND (1996)7
- A series of Vanguard Whitehall Funds.
- Advised by Schroder Investment Management North America Inc.
- Net assets of $74,614,769 and 8,269,510 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE
VANGUARD(R)INTERNATIONAL GROWTH FUND (1981)
- A series of Vanguard World Fund.
- Advised by Schroder Investment Management North America Inc.
- Net assets of $6,556,727,215 and 408,029,139 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $50,001-$100,000; RANKIN,$50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)INTERNATIONAL VALUE FUND (1983)
- A series of Vanguard Trustees' Equity Fund.
- Advised by Hansberger Global Investors, Inc.
- Net assets of $1,062,473,440 and 46,797,069 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. FedEx Corporation Retirement Savings Plan, Memphis, Tenn.,
owns approximately 7.6%.
- -------------
7 Vanguard International Explorer Fund did not become a Vanguard fund until
after June 30, 2002. Therefore, financial information for the fund is as of
August 31, 2002.
38
L
VANGUARD(R) LIFESTRATEGY(R) CONSERVATIVE GROWTH FUND (1994)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $2,203,163,094 and 164,939,169 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Mars Deferred Compensation Plan, Mount Olive, N.J., owns
approximately 6.4%.
2. IBEW Local 613 Defined Contribution Pension Plan, Atlanta,
Ga., owns approximately 5.2%.
VANGUARD(R) LIFESTRATEGY(R) GROWTH FUND (1994)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $3,542,159,633 and 222,710,105 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
Vanguard(R) LifeStrategy(R) Income Fund (1994)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $956,286,134 and 76,739,365 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Mars Deferred Compensation Plan, Mount Olive, N.J., owns
approximately 5.4%.
VANGUARD(R) LIFESTRATEGY(R) MODERATE GROWTH FUND (1994)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $4,172,622,068 and 280,931,147 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Georgia-Pacific Corporation Salaried 401(k) Plan, Atlanta,
Ga., owns approximately 6.8%.
39
Vanguard(R) Limited-Term Tax-Exempt Fund (1987)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $4,602,794,015 and 418,748,370 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)LONG-TERM BOND INDEX FUND (1994)
- A series of Vanguard Bond Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $627,086,722 and 58,178,492 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)LONG-TERM CORPORATE FUND (1973)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by Wellington Management Company, LLP.
- Net assets of $4,078,113,331 and 468,259,394 outstanding shares.
- Trustees who beneficially own shares of this fund:
MALKIEL, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) LONG-TERM TAX-EXEMPT FUND (1977)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,028,411,504 and 180,248,047 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)LONG-TERM TREASURY FUND (1986)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,842,256,576 and 168,739,974 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Variable Annuity Life Insurance Company, Houston, Tex., owns
approximately 13.1%.
40
M
VANGUARD(R)MASSACHUSETTS TAX-EXEMPT FUND (1998)
- A series of Vanguard Massachusetts Tax-Exempt Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $343,014,353 and 34,191,210 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)MID-CAP GROWTH FUND (1997)8
- A series of Vanguard Whitehall Funds.
- Advised by Provident Investment Counsel, Inc.
- Net assets of $24,158,480 and 2,266,913 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. George E. Handtmann III, Trustee, Handtmann Family Trust,
Carpinteria, Calif., owns approximately 5.6%.
VANGUARD(R)MID-CAP INDEX FUND (1998)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,604,384,362 and 288,408,749 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) MORGAN(TM) GROWTH FUND (1968)
- A series of Vanguard Morgan Growth Fund.
- Advised by Franklin Portfolio Associates, LLC; The Vanguard Group,
Inc.; and Wellington Management Company, LLP.
- Net assets of $3,115,244,592 and 237,332,253 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; RANKIN,$10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
- ----------------
8 Vanguard Mid-Cap Growth Fund did not become a Vanguard fund until after
June 30, 2002. Therefore, financial information for the fund is as of
August 31, 2002.
41
N
VANGUARD(R)NEW JERSEY LONG-TERM TAX-EXEMPT FUND (1988)
- A series of Vanguard New Jersey Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,522,761,229 and 126,533,806 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)NEW JERSEY TAX-EXEMPT MONEY MARKET FUND (1988)
- A series of Vanguard New Jersey Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,660,355,372 and 1,660,325,241 outstanding shares.
- Trustees who beneficially own shares of this fund:
MALKIEL, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)NEW YORK LONG-TERM TAX-EXEMPT FUND (1986)
- A series of Vanguard New York Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,083,811,536 and 185,238,703 outstanding shares.
- Trustees who beneficially own shares of this fund:
MALKIEL, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)NEW YORK TAX-EXEMPT MONEY MARKET FUND (1997)
- A series of Vanguard New York Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,488,170,440 and 1,488,186,020 outstanding shares.
- Trustees who beneficially own shares of this fund:
MALKIEL, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
O
VANGUARD(R) OHIO LONG-TERM TAX-EXEMPT FUND (1990)
- A series of Vanguard Ohio Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $518,992,304 and 42,938,256 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
42
VANGUARD(R)OHIO TAX-EXEMPT MONEY MARKET FUND (1990)
- A series of Vanguard Ohio Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $645,445,328 and 645,461,825 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Jaton Trust, Hudson, Ohio, owns approximately 9.3%.
P
VANGUARD(R)PACIFIC STOCK INDEX FUND (1990)
- A series of Vanguard International Equity Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,831,183,459 and 247,670,771 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; ELLIS, over $100,000;
MALKIEL, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this fund:
1. Vanguard Total International Stock Index Fund, Valley Forge,
Pa., owns approximately 45.7%.
VANGUARD(R) PENNSYLVANIA LONG-TERM TAX-EXEMPT FUND (1986)
- A series of Vanguard Pennsylvania Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,362,298,358 and 206,630,898 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)PENNSYLVANIA TAX-EXEMPT MONEY MARKET FUND (1988)
- A series of Vanguard Pennsylvania Tax-Free Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,348,681,765 and 2,348,924,538 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $1-$10,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
43
VANGUARD(R) PRECIOUS METALS FUND (1984)
- A series of Vanguard Specialized Funds.
- Advised by M&G Investment Management Limited.
- Net assets of $604,802,441 and 54,263,997 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
Vanguard(R) PRIMECAP Fund (1984)
- A series of Vanguard PRIMECAP Fund.
- Advised by PRIMECAP Management Company.
- Net assets of $16,239,551,388 and 375,179,146 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; RANKIN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. FedEx Corporation Retirement Savings Plan, Memphis, Tenn.,
owns approximately 7.2%.
VANGUARD(R)PRIME MONEY MARKET FUND (1975)
- A series of Vanguard Money Market Reserves.
- Advised by The Vanguard Group, Inc.
- Net assets of $54,583,318,804 and 54,583,215,817 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN,$1-$10,000; HEISEN, $1-$10,000; WILSON, $1-$10,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
R
VANGUARD(R)REIT INDEX FUND (1996)
- A series of Vanguard Specialized Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,082,477,884 and 138,506,529 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
44
S
VANGUARD(R)SELECTED VALUE FUND (1996)
- A series of Vanguard Whitehall Funds.
- Advised by Barrow, Hanley, Mewhinney & Strauss, Inc.
- Net assets of $1,396,256,753 and 102,600,127 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)SHORT-TERM BOND INDEX FUND (1994)
- A series of Vanguard Bond Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,559,124,209 and 253,017,313 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)SHORT-TERM CORPORATE FUND (1982)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $10,780,906,242 and 1,009,448,233 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)SHORT-TERM FEDERAL FUND (1987)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,696,662,355 and 254,436,916 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) SHORT-TERM TAX-EXEMPT FUND (1977)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,289,942,355 and 209,155,332 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
45
VANGUARD(R)SHORT-TERM TREASURY FUND (1991)
- A series of Vanguard Fixed Income Securities Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,047,320,040 and 286,459,874 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)SMALL-CAP GROWTH INDEX FUND (1998)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $532,243,893 and 51,894,900 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. State Street Bank & Trust Co., Trustee, IBM Tax Deferred
Savings Plan, Westwood, Mass., owns approximately 22.1%.
VANGUARD(R)SMALL-CAP INDEX FUND (1960)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $4,912,632,143 and 258,573,853 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)SMALL-CAP VALUE INDEX FUND (1998)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,191,637,838 and 206,295,073 outstanding shares.
- Trustees who beneficially own shares of this fund:
ELLIS, over $100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. State Street Bank & Trust Co., Trustee, IBM Tax Deferred
Savings Plan, Westwood, Mass., owns approximately 19.8%.
VANGUARD(R)STAR(TM)FUND (1985)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $7,904,492,940 and 513,940,050 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
46
VANGUARD(R)STRATEGIC EQUITY FUND (1995)
- A series of Vanguard Horizon Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $983,085,877 and 66,436,191 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
T
VANGUARD(R)TAX-EXEMPT MONEY MARKET FUND (1980)
- A series of Vanguard Municipal Bond Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $9,770,495,564 and 9,771,580,382 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) TAX-MANAGED BALANCED FUND (1994)
- A series of Vanguard Tax-Managed Funds(R).
- Advised by The Vanguard Group, Inc.
- Net assets of $422,631,186 and 26,167,405 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) TAX-MANAGED CAPITAL APPRECIATION FUND (1994)
- A series of Vanguard Tax-Managed Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,269,441,108 and 84,895,673 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)TAX-MANAGED GROWTH AND INCOME FUND (1994)
- A series of Vanguard Tax-Managed Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $2,025,964,724 and 81,398,859 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
47
VANGUARD(R) TAX-MANAGED INTERNATIONAL FUND (1999)
- A series of Vanguard Tax-Managed Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $425,324,960 and 55,248,649 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund:
1. Blue Cross and Blue Shield of Florida Inc., Jacksonville,
Fla., owns approximately 10.3%.
VANGUARD(R) TAX-MANAGED SMALL-CAP FUND (1999)
- A series of Vanguard Tax-Managed Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $701,689,603 and 46,971,610 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)TOTAL BOND MARKET INDEX FUND (1986)
- A series of Vanguard Bond Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $24,122,638,267 and 2,381,216,290 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) TOTAL INTERNATIONAL STOCK INDEX FUND (1996)
- A series of Vanguard STAR Funds.
- Advised by the fund's board of trustees.
- Net assets of $3,225,060,939 and 351,353,764 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
48
VANGUARD(R)TOTAL STOCK MARKET INDEX FUND (1992)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $24,320,799,879 and 1,038,220,199 outstanding shares.
- Trustees who beneficially own shares of this fund: BRENNAN, over
$100,000; MALKIEL, over $100,000; RANKIN, over $100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)TREASURY MONEY MARKET FUND (1983)
- A series of Vanguard Treasury Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $4,722,799,221 and 4,722,173,907 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund:
1. Georgia-Pacific Corporation Salaried 401(k) Plan, Atlanta,
Ga., owns approximately 5.8%.
U
VANGUARD(R)U.S. GROWTH FUND (1959)
- A series of Vanguard World Fund.
- Advised by Alliance Capital Management L.P.
- Net assets of $7,113,376,520 and 468,027,061 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)U.S. VALUE FUND (2000)
- A series of Vanguard Malvern Funds.
- Advised by Grantham, Mayo, Van Otterloo & Co. LLC.
- Net assets of $551,594,274 and 50,374,035 outstanding shares.
- Trustees who beneficially own shares of this fund:
WILSON, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
49
VANGUARD(R) UTILITIES INCOME FUND (1992)
- A series of Vanguard Specialized Funds.
- Advised by Wellington Management Company, LLP.
- Net assets of $655,650,183 and 59,911,015 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
V
VANGUARD(R)VALUE INDEX FUND (1992)
- A series of Vanguard Index Funds.
- Advised by The Vanguard Group, Inc.
- Net assets of $3,860,095,054 and 227,520,844 outstanding shares.
- Trustees who beneficially own shares of this fund: NONE.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) VARIABLE INSURANCE FUND-BALANCED PORTFOLIO (1991)
- A series of Vanguard Variable Insurance Fund.
- Advised by Wellington Management Company, LLP.
- Net assets of $744,708,654 and 47,899,561 outstanding shares.
- Trustees who beneficially own shares of this portfolio:
BRENNAN, $10,001-$50,000.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-DIVERSIFIED VALUE PORTFOLIO (1999)
- A series of Vanguard Variable Insurance Fund.
- Advised by Barrow, Hanley, Mewhinney & Strauss, Inc.
- Net assets of $186,687,194 and 18,095,764 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R) VARIABLE INSURANCE FUND-EQUITY INCOME PORTFOLIO (1993)
- A series of Vanguard Variable Insurance Fund.
- Advised by Newell Associates.
- Net assets of $339,098,758 and 18,444,264 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
50
VANGUARD(R)VARIABLE INSURANCE FUND-EQUITY INDEX PORTFOLIO (1991)
- A series of Vanguard Variable Insurance Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $1,091,166,238 and 45,178,952 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-GROWTH PORTFOLIO (1993)
- A series of Vanguard Variable Insurance Fund.
- Advised by Alliance Capital Management L.P.
- Net assets of $377,357,753 and 38,113,491 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-HIGH YIELD BOND PORTFOLIO (1996)
- A series of Vanguard Variable Insurance Fund.
- Advised by Wellington Management Company, LLP.
- Net assets of $194,573,480 and 24,235,367 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-INTERNATIONAL PORTFOLIO (1994)
- A series of Vanguard Variable Insurance Fund.
- Advised by Schroder Investment Management North America Inc.
- Net assets of $247,478,246 and 22,003,644 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-MID-CAP INDEX PORTFOLIO (1999)
- A series of Vanguard Variable Insurance Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $307,611,985 and 25,603,955 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
51
VANGUARD(R)VARIABLE INSURANCE FUND-MONEY MARKET PORTFOLIO (1991)
- A series of Vanguard Variable Insurance Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $956,653,134 and 956,633,330 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-REIT INDEX PORTFOLIO (1999)
- A series of Vanguard Variable Insurance Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $183,127,046 and 13,058,443 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-SHORT-TERM CORPORATE PORTFOLIO (1999)
- A series of Vanguard Variable Insurance Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $190,735,012 and 18,526,778 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-SMALL COMPANY GROWTH PORTFOLIO (1996)
- A series of Vanguard Variable Insurance Fund.
- Advised by Granahan Investment Management, Inc., and Grantham,
Mayo, Van Otterloo & Co. LLC.
- Net assets of $471,645,394 and 33,890,732 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
VANGUARD(R)VARIABLE INSURANCE FUND-TOTAL BOND MARKET INDEX PORTFOLIO (1991)
- A series of Vanguard Variable Insurance Fund.
- Advised by The Vanguard Group, Inc.
- Net assets of $581,439,762 and 52,141,998 outstanding shares.
- Trustees who beneficially own shares of this portfolio: NONE.
- Shareholders who beneficially own more than 5% of this portfolio:
NONE.
52
W
VANGUARD(R) WELLESLEY(R) INCOME FUND (1970)
- A series of Vanguard Wellesley Income Fund.
- Advised by Wellington Management Company, LLP.
- Net assets of $8,035,103,304 and 373,366,242 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) WELLINGTON(TM) FUND (1929)
- A series of Vanguard Wellington Fund.
- Advised by Wellington Management Company, LLP.
- Net assets of $24,415,287,529 and 874,786,511 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; HEISEN, $1-$10,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R)WINDSOR(TM)FUND (1958)
- A series of Vanguard Windsor Funds.
- Advised by Sanford C. Bernstein & Co., LLC; The Vanguard Group, Inc.;
and Wellington Management Company, LLP.
- Net assets of $15,641,123,897 and 1,015,167,414 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, over $100,000; GUPTA,$50,001-$100,000;
MALKIEL, over $100,000; RANKIN, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
VANGUARD(R) WINDSOR(TM) II FUND (1985)
- A series of Vanguard Windsor Funds.
- Advised by Barrow, Hanley, Mewhinney & Strauss, Inc.; Equinox Capital
Management, LLC; Tukman Capital Management, Inc.; and
The Vanguard Group, Inc.
- Net assets of $23,944,474,222 and 945,845,815 outstanding shares.
- Trustees who beneficially own shares of this fund:
BRENNAN, $1-$10,000;RANKIN, $50,001-$100,000.
- Shareholders who beneficially own more than 5% of this fund: NONE.
- ---------------
500 is a trademark of The McGraw-Hill Companies, Inc., and has been licensed for
use by The Vanguard Group, Inc. Vanguard mutual funds are not sponsored,
endorsed, sold, or promoted by Standard & Poor's, and Standard & Poor's makes no
representation regarding the advisability of investing in the funds.
Calvert Social Index is a trademark of Calvert Group, Ltd., and has been
licensed for use by The Vanguard Group, Inc. Vanguard Calvert Social Index Fund
is not sponsored, endorsed, sold, or promoted by Calvert Group, Ltd., and
Calvert Group, Ltd. makes no representation regarding the advisability of
investing in the fund.
(This Page Left Intentionally Blank)
[PICTURE OF SHIP]
[VANGUARD GROUP LOGO]
The Vanguard Group(R)
Post Office Box 2600
Valley Forge, PA 19482-2600
(C)2002 The Vanguard Group, Inc.
All rights reserved.
Vanguard Marketing
Corporation, Distributor.
PROX1 092002
[SHIP] INTRODUCING VANGUARD'S ezVote(SM)
[THE VANGUARD GROUP LOGO] PROXY CARD
Our new proxy card makes voting faster and easier than
ever. And it reduces proxy costs-- savings that we pass
along to you in the form of lower fund expenses!
- --------------------------------------------------------------------------------
Step One: CHOOSE YOUR ezVote BALLOT
- --------------------------------------------------------------------------------
Use the Consolidated Ballot at the bottom of this page to vote just once for all
your accounts registered to the same address and Tax ID number.
----------
OR
---------
Use the Individual Ballots on the back of this page and any additional pages to
vote each account separately.
- --------------------------------------------------------------------------------
Step Two: CHOOSE YOUR ezVote METHOD OF VOTING
- --------------------------------------------------------------------------------
VOTE BY INTERNET ---------- VOTE BY PHONE ---------- VOTE BY MAIL * *
* Go to www.vanguard.com OR * Call 1-888-221-0689 OR * Complete your proxy ballot.
* Click on Vote My Proxy. ---------- *Enter the Master Control ---------- * Sign and date your card.
* Enter the Master Control Number shown below. * Mail in the envelope provided.
Number shown below.
- ------------------------------------------------------------------------------------------------------------------
MASTER CONTROL NUMBER:
- --------------------------------------------------------------------------------
PLEASE NOTE: Before voting, read the proxy statement carefully for an
explanation of each proposal. Your proxy will be voted FOR each
proposal unless you specify otherwise. Your votes will count only for
funds actually considering specific proposals. The Board of Trustees
recommends a vote FOR all proposals and nominees.
By signing this proxy ballot, I appoint John J. Brennan, J. Lawrence Wilson, and
R. Gregory Barton as my Attorneys to vote all Vanguard fund shares that I am
entitled to vote at the Special Meeting of Shareholders to be held at 9:30 a.m.,
E.T., on December 3, 2002, and at any adjournments thereof. Any one of my
Attorneys may vote my shares as specified on this ballot, vote any other matters
that arise at the meeting in accordance with his best judgment, and appoint
substitute Attorneys to vote on my behalf. I revoke any previous proxies that I
have executed, and acknowledge receipt of the Notice of Special Meeting of
Shareholders and the proxy statement. PROXY SOLICITATION BY THE BOARD OF
TRUSTEES.
- --------------------------------------------------------------------------------
CONSOLIDATED BALLOT
- --------------------------------------------------------------------------------
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. [X]
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES:
(01) John J. Brennan, (02) Charles D. Ellis, (03) Rajiv L. Gupta, FOR WITHHOLD FOR ALL
04) JoAnn Heffernan Heisen,(05) Burton G. Malkiel*, ALL ALL EXCEPT**
(06) Alfred M. Rankin, Jr.,(07) J. Lawrence Wilson ( ) ( ) ( ) 1.
*NOT a nominee for Vanguard Equity Income Fund or
Vanguard Growth Equity Fund.
**Write number(s) of excluded nominees: ----------------------------
FOR AGAINST ABSTAIN
2. Change certain funds' policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. Authorize the trustees of certain index funds to change target indexes. ( ) ( ) ( ) 3.
4. Reclassify certain index funds as nondiversified. ( ) ( ) ( ) 4.
5. Change two money market funds' industry concentration policy. ( ) ( ) ( ) 5.
6. Change certain bond and balanced funds' policy on borrowing money. ( ) ( ) ( ) 6.
7A.Change the Utilities Income Fund's investment objective. ( ) ( ) ( ) 7A.
B.Change the Utilities Income Fund's concentration in utilities stocks. ( ) ( ) ( ) B.
Date __________________ 2002
NOTE: All required shareholders should sign exactly as their
names appear on this ballot. When signing in a fiduciary capacity
(e.g., trustee, etc.), please so state. Signers for corporate and
partnership accounts should be authorized persons and indicate
their title.
-------------------------------------------
-------------------------------------------
Signature(s) (and Title(s), if applicable).
Date______________, 2002
- --------------------------------------------------------------------------------
INDIVIDUAL BALLOTS
TRUSTEE NOMINEES:(01) John J. Brennan, (02) Charles D. Ellis, (03) Rajiv L.
Gupta, (04) JoAnn Heffernan Heisen, (05) Burton G. Malkiel*, (06) Alfred M.
Rankin, Jr., (07) J. Lawrence Wilson
* NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
- --------------------------------------------------------------------------------
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
- ------------------------------------------------------------ ----------------------------------------------------------
XXX XXXXXXXXXX XXX XXX XXXXXXXXXX XXX
NAME PRINTS HERE NAME PRINTS HERE
NAME PRINTS HERE CONTROL NUMBER NAME PRINTS HERE CONTROL NUMBER
XXX XXX XXX XXX XX XXX XXX XXX XXX XX
FUND NAME PRINTS HERE FUND NAME PRINTS HERE
1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL 1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL
(REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT** (REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT**
**Except#________________________ ( ) ( ) ( ) **Except#________________________ ( ) ( ) ( )
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
2 NOT APPLICABLE ( ) ( ) ( ) 2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( )
3 NOT APPLICABLE ( ) ( ) ( ) 3 NOT APPLICABLE ( ) ( ) ( )
4 NOT APPLICABLE ( ) ( ) ( ) 4 NOT APPLICABLE ( ) ( ) ( )
5 NOT APPLICABLE ( ) ( ) ( ) 5 NOT APPLICABLE ( ) ( ) ( )
6 NOT APPLICABLE ( ) ( ) ( ) 6 NOT APPLICABLE ( ) ( ) ( )
7A NOT APPLICABLE ( ) ( ) ( ) 7A NOT APPLICABLE ( ) ( ) ( )
B NOT APPLICABLE ( ) ( ) ( ) B NOT APPLICABLE ( ) ( ) ( )
- ------------------------------------------------------------- ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
XXX XXXXXXXXXX XXX XXX XXXXXXXXXX XXX
NAME PRINTS HERE NAME PRINTS HERE
NAME PRINTS HERE CONTROL NUMBER NAME PRINTS HERE CONTROL NUMBER
XXX XXX XXX XXX XX XXX XXX XXX XXX XX
FUND NAME PRINTS HERE FUND NAME PRINTS HERE
1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL 1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL
(REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT** (REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT**
**Except#________________________ ( ) ( ) ( ) **Except#________________________ ( ) ( ) ( )
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( ) 2 NOT APPLICABLE ( ) ( ) ( )
3 AUTHORIZE CHANGE OF INDEX ( ) ( ) ( ) 3 NOT APPLICABLE ( ) ( ) ( )
4 NOT APPLICABLE ( ) ( ) ( ) 4 RECLASSIFY AS NONDIVERSIFIED ( ) ( ) ( )
5 NOT APPLICABLE ( ) ( ) ( ) 5 NOT APPLICABLE ( ) ( ) ( )
6 NOT APPLICABLE ( ) ( ) ( ) 6 NOT APPLICABLE ( ) ( ) ( )
7A NOT APPLICABLE ( ) ( ) ( ) 7A NOT APPLICABLE ( ) ( ) ( )
B NOT APPLICABLE ( ) ( ) ( ) B NOT APPLICABLE ( ) ( ) ( )
- ------------------------------------------------------------- ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
XXX XXXXXXXXXX XXX XXX XXXXXXXXXX XXX
NAME PRINTS HERE NAME PRINTS HERE
NAME PRINTS HERE CONTROL NUMBER NAME PRINTS HERE CONTROL NUMBER
XXX XXX XXX XXX XX XXX XXX XXX XXX XX
FUND NAME PRINTS HERE FUND NAME PRINTS HERE
1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL 1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL
(REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT** (REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT**
**Except#________________________ ( ) ( ) ( ) **Except#________________________ ( ) ( ) ( )
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( ) 2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( )
3 NOT APPLICABLE ( ) ( ) ( ) 3 AUTHORIZE CHANGE OF INDEX ( ) ( ) ( )
4 RECLASSIFY AS NONDIVERSIFIED ( ) ( ) ( ) 4 RECLASSIFY AS NONDIVERSIFIED ( ) ( ) ( )
5 NOT APPLICABLE ( ) ( ) ( ) 5 NOT APPLICABLE ( ) ( ) ( )
6 NOT APPLICABLE ( ) ( ) ( ) 6 NOT APPLICABLE ( ) ( ) ( )
7A NOT APPLICABLE ( ) ( ) ( ) 7A NOT APPLICABLE ( ) ( ) ( )
B NOT APPLICABLE ( ) ( ) ( ) B NOT APPLICABLE ( ) ( ) ( )
- ------------------------------------------------------------- ---------------------------------------------------------
NOTE: All required shareholders should sign
exactly as their names appear on this ballot. When signing in a fiduciary
capacity (e.g., trustee, etc.), please so state. Signers for corporate and
partnership accounts should be authorized persons and indicate their title.
Date _________________________________________
_____________________ 2002 Signature(s) (and Title(s), if applicable)
- --------------------------------------------------------------------------------
INDIVIDUAL BALLOTS
TRUSTEE NOMINEES:(01) John J. Brennan, (02) Charles D. Ellis, (03) Rajiv L.
Gupta, (04) JoAnn Heffernan Heisen, (05) Burton G. Malkiel*, (06) Alfred M.
Rankin, Jr., (07) J. Lawrence Wilson
* NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
- --------------------------------------------------------------------------------
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
- ------------------------------------------------------------ ----------------------------------------------------------
XXX XXXXXXXXXX XXX XXX XXXXXXXXXX XXX
NAME PRINTS HERE NAME PRINTS HERE
NAME PRINTS HERE CONTROL NUMBER NAME PRINTS HERE CONTROL NUMBER
XXX XXX XXX XXX XX XXX XXX XXX XXX XX
FUND NAME PRINTS HERE FUND NAME PRINTS HERE
1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL 1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL
(REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT** (REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT**
**Except#________________________ ( ) ( ) ( ) **Except#________________________ ( ) ( ) ( )
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( ) 2 NOT APPLICABLE ( ) ( ) ( )
3 NOT APPLICABLE ( ) ( ) ( ) 3 NOT APPLICABLE ( ) ( ) ( )
4 NOT APPLICABLE ( ) ( ) ( ) 4 NOT APPLICABLE ( ) ( ) ( )
5 CHANGE INDUSTRY CONCENTRATION ( ) ( ) ( ) 5 NOT APPLICABLE ( ) ( ) ( )
6 NOT APPLICABLE ( ) ( ) ( ) 6 CHANGE POLICY ON BORROWING ( ) ( ) ( )
7A NOT APPLICABLE ( ) ( ) ( ) 7A NOT APPLICABLE ( ) ( ) ( )
B NOT APPLICABLE ( ) ( ) ( ) B NOT APPLICABLE ( ) ( ) ( )
- ------------------------------------------------------------- ----------------------------------------------------------
- ------------------------------------------------------------ ----------------------------------------------------------
XXX XXXXXXXXXX XXX XXX XXXXXXXXXX XXX
NAME PRINTS HERE NAME PRINTS HERE
NAME PRINTS HERE CONTROL NUMBER NAME PRINTS HERE CONTROL NUMBER
XXX XXX XXX XXX XX XXX XXX XXX XXX XX
FUND NAME PRINTS HERE FUND NAME PRINTS HERE
1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL 1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL
(REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT** (REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT**
**Except#________________________ ( ) ( ) ( ) **Except#________________________ ( ) ( ) ( )
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( ) 2 NOT APPLICABLE ( ) ( ) ( )
3 NOT APPLICABLE ( ) ( ) ( ) 3 NOT APPLICABLE ( ) ( ) ( )
4 NOT APPLICABLE ( ) ( ) ( ) 4 RECLASSIFY AS NONDIVERSIFIED ( ) ( ) ( )
5 NOT APPLICABLE ( ) ( ) ( ) 5 NOT APPLICABLE ( ) ( ) ( )
6 CHANGE POLICY ON BORROWING ( ) ( ) ( ) 6 CHANGE POLICY ON BORROWING ( ) ( ) ( )
7A NOT APPLICABLE ( ) ( ) ( ) 7A NOT APPLICABLE ( ) ( ) ( )
B NOT APPLICABLE ( ) ( ) ( ) B NOT APPLICABLE ( ) ( ) ( )
- ------------------------------------------------------------- ----------------------------------------------------------
- ------------------------------------------------------------
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE CONTROL NUMBER
XXX XXX XXX XXX XX
FUND NAME PRINTS HERE
1. ELECTION OF TRUSTEES FOR WITHHOLD FOR ALL
(REFER TO NOMINEES AT TOP OF PAGE) ALL ALL EXCEPT**
**Except#________________________ ( ) ( ) ( )
FOR AGAINST ABSTAIN
2 INVEST IN OTHER MUTUAL FUNDS ( ) ( ) ( )
3 NOT APPLICABLE ( ) ( ) ( )
4 NOT APPLICABLE ( ) ( ) ( )
5 NOT APPLICABLE ( ) ( ) ( )
6 NOT APPLICABLE ( ) ( ) ( )
7A CHANGE UTILITIES FUND OBJECTIVE ( ) ( ) ( )
B CHANGE UTILITIES FUND CONCENTRATION( ) ( ) ( )
- -------------------------------------------------------------
NOTE: All required shareholders should sign
exactly as their names appear on this ballot. When signing in a fiduciary
capacity (e.g., trustee, etc.), please so state. Signers for corporate and
partnership accounts should be authorized persons and indicate their title.
Date _________________________________________
_____________________ 2002 Signature(s) (and Title(s), if applicable)
[SHIP]
[THE VANGUARD GROUP LOGO]
EASY, FAST ELECTRONIC OPTIONS
VOTE BY INTERNET: Go to www.vanguard.com and click on Vote My Proxy.
Enter the *** MASTER CONTROL NUMBER *** shown below.
VOTE BY PHONE: Call 1-888-221-0689. Enter the *** MASTER CONTROL NUMBER ***
shown below.
*** MASTER CONTROL NUMBER: 999 999 999 999 99 ***
FUND NAME PRINTS HERE
By signing this proxy ballot, I appoint John J. Brennan, J. Lawrence Wilson, and
R. Gregory Barton as my Attorneys to vote all Vanguard fund shares that I am
entitled to vote at the Special Meeting of Shareholders to be held at 9:30 a.m.,
E.T., on December 3, 2002, and at any adjournments thereof. Any one of my
Attorneys may vote my shares as specified on this ballot, vote any other matters
that arise at the meeting in accordance with his best judgment, and appoint
substitute Attorneys to vote on my behalf. I revoke any previous proxies that I
have executed, and acknowledge receipt of the Notice of Special Meeting of
Shareholders and the proxy statement. PROXY SOLICITATION BY THE BOARD OF
TRUSTEES.
Date________________________ 2002
NOTE: All required shareholders should sign exactly as their
names appear on this ballot. When signing in a fiduciary
capacity (e.g. trustee, etc.), please so state. Signers for
corporate and partnership accounts should be authorized
persons and indicate their title.
------------------------------------------
------------------------------------------
Signature(s) (and Title(s), if applicable)
VGD
CONTINUE ON REVERSE SIDE
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. NOT APPLICABLE ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-1
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-2
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
- -----------------------------------------------------------
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. Authroize the fund's trustees to change the target index. ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-3
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. NOT APPLICABLE ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. Reclasify the fund as nondiversified. ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-4
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. Reclasify the fund as nondiversified. ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-5
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. Authorize the fund's trustees to change the target index. ( ) ( ) ( ) 3.
4. Reclasify the fund as nondiversified. ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-6
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. Change the fund's industry concentration policy. ( ) ( ) ( ) 5.
6. NOT APPLICABLE. ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-7
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. NOT APPLICABLE ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. Change the fund's policy on borrowing money. ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-8
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. Change the fund's policy on borrowing money. ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-9
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. Reclasify the fund as nondiversified. ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. Change the fund's policy on borrowing money. ( ) ( ) ( ) 6.
7A.NOT APPLICABLE ( ) ( ) ( ) 7A.
B.NOT APPLICABLE ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-10
PLEASE SIGN AND DATE ON REVERSE SIDE
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS. (X)
PROPOSALS:
1. ELECT THE FOLLOWING NOMINEES AS TRUSTEES: FOR WITHHOLD FOR ALL
(01) John J. Brennan, (02) Charles D. Ellis, ALL ALL EXCEPT**
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( ) ( ) ( ) 1.
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
___________________________________________________________
** Write number(s) of excluded nominee(s) on the line above:
FOR AGAINST ABSTAIN
2. Change the fund's policy on investing in other mutual funds. ( ) ( ) ( ) 2.
3. NOT APPLICABLE ( ) ( ) ( ) 3.
4. NOT APPLICABLE ( ) ( ) ( ) 4.
5. NOT APPLICABLE ( ) ( ) ( ) 5.
6. NOT APPLICABLE ( ) ( ) ( ) 6.
7A.Change the fund's investment objective. ( ) ( ) ( ) 7A.
B.Change the fund's concentration in utilities stocks. ( ) ( ) ( ) B.
- --------------------------------------------------------------------------------
PLEASE NOTE:
* Before voting, read the proxy statement carefully for an explanation of each
proposal.
* Your proxy will be voted FOR each proposal unless you specify otherwise.
* The Board of Trustees recommends a vote FOR all proposals and nominees.
- --------------------------------------------------------------------------------
VGD-11
Vanguard EzVote E-Delivery Template
online@vanguard.com
IMPORTANT FUND PROPOSALS: YOUR VOTE COUNTS
The Vanguard Group
Thank you for electing to receive proxy materials electronically.
On December 3, 2002, all Vanguard(R) funds will conduct a Special Meeting of
Shareholders to consider important fund proposals. Those proposals are outlined
in your proxy statement.
To reduce expenses, we've prepared a combined proxy statement. Please review the
proposal(s) for the fund(s) you owned as of September 6, 2002, and cast your
vote. The Board of Trustees recommends a vote FOR all proposals under
consideration.
Casting your vote online is faster and easier than ever. Our new EzVote
Consolidated Proxy lets you vote just once for all of your accounts registered
to the same address and Tax ID number. Or you can continue to vote each of these
accounts separately. The choice is yours.
* You can read the proxy statement at:
http://personal.vanguard.com/pdf/proxy2002.pdf
* You can cast your vote at
http://www.proxyweb.com/vanguard or by touch-tone phone at 1-888-221-0689. You
will need your Master Control Number shown below.
~HHBEGIN~
EZVOTE MASTER CONTROL NUMBER:
~CNTLNUM~
ACCOUNT NUMBER: ALL ACCTS
INDIVIDUAL CONTROL NUMBER - [FUND NAME]
~CNTLNUM~
ACCOUNT NUMBER: [10 DIGIT ACCOUNT NUMBER]
INDIVIDUAL CONTROL NUMBER - [FUND NAME]
~CNTLNUM~
ACCOUNT NUMBER: [10 DIGIT ACCOUNT NUMBER]
~HHEND~
When you vote online, you appoint John J. Brennan, J. Lawrence Wilson, and R.
Gregory Barton as your Attorneys to vote on your behalf at the Special Meeting
of Shareholders and at any adjournments thereof. Any one of your Attorneys may
vote as you specify, vote on any matters that arise at the meeting in accordance
with his best judgment, and appoint substitute Attorneys to vote on your behalf.
You acknowledge receipt of the Notice of Special Meeting of Shareholders and the
proxy statement, and revoke any previous proxies you have executed. Proxy
Solicitation by the Board of Trustees.
If you need to contact us, don't reply to this e-mail. Instead:
1. For questions about fund proposals or the shareholder meeting, call
Vanguard's Investor Information Department at 1-800-992-0833. Clients of
Vanguard's Institutional Investor Group or our Voyager(TM) or Flagship(TM)
Services should call their Vanguard representative or service team with
questions.
2. For technical questions about the online proxy vote, call Vanguard Web
Technical Support Services at 1-800-860-8394.
You can update your mailing preferences or change your e-mail address online at
http://www.vanguard.com. Any change will apply to all Vanguard accounts
registered under your Tax ID number.
Vanguard single account E-Delivery Template
online@vanguard.com
IMPORTANT FUND PROPOSALS: YOUR VOTE COUNTS
The Vanguard Group
Thank you for electing to receive proxy materials electronically.
On December 3, 2002, all Vanguard(R) funds will conduct a Special Meeting of
Shareholders to consider important fund proposals. Those proposals are outlined
in your proxy statement.
To reduce expenses, we've prepared a combined proxy statement. Please review the
proposal(s) for the fund you owned as of September 6, 2002, and cast your vote.
The Board of Trustees recommends a vote FOR all proposals under consideration.
* You can read the proxy statement at:
http://personal.vanguard.com/pdf/proxy2002.pdf
* You can cast your vote at
http://www.proxyweb.com/vanguard or by touch-tone phone at 1-888-221-0689. You
will need your Master Control Number shown below.
~HHBEGIN~
MASTER CONTROL NUMBER: ~CNTLNUM~
FUND: ~FUND~
ACCOUNT NUMBER: ~ACCTNUM~
~HHEND~
When you vote online, you appoint John J. Brennan, J. Lawrence Wilson, and R.
Gregory Barton as your Attorneys to vote on your behalf at the Special Meeting
of Shareholders and at any adjournments thereof. Any one of your Attorneys may
vote as you specify, vote on any matters that arise at the meeting in accordance
with his best judgment, and appoint substitute Attorneys to vote on your behalf.
You acknowledge receipt of the Notice of Special Meeting of Shareholders and the
proxy statement, and revoke any previous proxies you have executed. Proxy
Solicitation by the Board of Trustees.
If you need to contact us, don't reply to this e-mail. Instead:
1. For questions about fund proposals or the shareholder meeting, call
Vanguard's Investor Information Department at 1-800-992-0833. Clients of
Vanguard's Institutional Investor Group or our Voyager(TM) or Flagship(TM)
Services should call their Vanguard representative or service team with
questions.
2. For technical questions about the online proxy vote, call Vanguard Web
Technical Support Services at 1-800-860-8394.
You can update your mailing preferences or change your e-mail address online at
http://www.vanguard.com. Any change will apply to all Vanguard accounts
registered under your Tax ID number.
[THE VANGUARD GROUP LOGO]
WELCOME TO VANGUARD'S ELECTRONIC PROXY VOTING SITE
o If you owned shares in any of the Vanguard funds on September 6, 2002, you
can cast your proxy vote online -- a fast, easy, cost effective way to
vote!
o The Proxy Statement details each proposal and is available on Vanguard.com
or by clicking the link.
o You'll need the Master Control Number included on your proxy card or within
your e-delivery notification.
o If you've received multiple Master Control Numbers, please remember to vote
each separately. Enter the Master Control Number here.[XXX XXX XXX XXX XX]
Check here [ ] to vote all proposals as the Trustees recommend,
then click the CONTINUE button below.
-OR
To vote each proposal separately, click the CONTINUE button only.
[CONTINUE BUTTON]
proxyweb.com is a service of: MIS, an ADP company. Full service proxy
specialists
This site is best viewed using Netscape version 4.7 or Internet Explorer
version 5.0 or higher and using a display resolution of 800 X 600.
[THE VANGUARD GROUP LOGO]
The ezVote(SM) Master Control Number you entered consolidated the following
individual ballots. To vote all of your accounts exactly the same, using one
ballot, simply vote the ballot below.
xxx xxx xxx xx xx xxx xxx xxx xx xx xxx xxx xxx xx xx xxx xxx xxx xx xx
================================================================================
To vote each account separately, click here to vote your individual ballots.
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" EACH PROPOSAL AND NOMINEE. To Vote
"FOR"each proposal, simply click the 'Submit' button below. View the Proxy
Statement .
Proposal 1. Elect the following nominees as trustees:
(01) John J. Brennan, (02)Charles D. Ellis, ( )FOR ALL
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( )WITHHOLD ALL
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr., ( )FOR ALL EXCEPT: (Enter the number(s) of the
(07) J. Lawrence Wilson nominee(s) you wish to exclude, separated by a
comma,in the text field below.)
[_______________________]
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity
Fund.
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 2. Change certain funds' policy on investing in other mutual funds. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 3. Authorize the trustees of certain index funds to change target indexes. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 4. Reclassify certain index funds as nondiversified. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 5. Change two money market funds' industry concentration policy. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 6. Change certain bond and balanced funds' policy on borrowing money. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7A. Change the Utilities Income Fund's investment objective. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7B. Change the Utilities Income Fund's concentration in utilities stocks. ( )FOR ( )AGAINST ( )ABSTAIN
=================================================================================================================================
Press this button to[SUBMIT]your Proxy Vote.
[THE VANGUARD GROUP LOGO]
You have elected to vote each account separately. Please vote each of the
individual ballots below or click here to return to our consolidated ezVote(SM).
VANGUARD ADMIRAL TREASURY MONEY MARKET FUND
Control Number: XXX XXX XXX XXX XX
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" EACH PROPOSAL AND NOMINEE. To Vote
"FOR"each proposal, simply click the 'Submit' button below.
View the Proxy Statement
Proposal 1. Elect the following nominees as trustees:
(01) John J. Brennan, (02)Charles D. Ellis, ( )FOR ALL
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( )WITHHOLD ALL
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr., ( )FOR ALL EXCEPT: (Enter the number(s) of the
(07) J. Lawrence Wilson nominee(s) you wish to exclude, separated by a
comma,in the text field below.)
[_______________________]
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity
Fund.
- -----------------------------------------------------------------------------------------------------------------------------------
Proposal 2. Change certain funds' policy on investing in other mutual funds. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 3. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 4. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 5. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 6. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7A. Not Applicable. Your fund is not seeking a vote for this proposal.(X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7B. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
=================================================================================================================================
VANGUARD GROWTH EQUITY FUND
Control Number: XXX XXX XXX XXX XX
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" EACH PROPOSAL AND NOMINEE. To Vote
"FOR"each proposal, simply click the 'Submit' button below.
View the Proxy Statement
Proposal 1. Elect the following nominees as trustees:
(01) John J. Brennan, (02)Charles D. Ellis, ( )FOR ALL
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( )WITHHOLD ALL
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr., ( )FOR ALL EXCEPT: (Enter the number(s) of the
(07) J. Lawrence Wilson nominee(s) you wish to exclude, separated by a
comma,in the text field below.)
[_______________________]
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity
Fund.
- -----------------------------------------------------------------------------------------------------------------------------------
Proposal 2. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 3. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 4. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 5. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 6. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7A. Not Applicable. Your fund is not seeking a vote for this proposal.(X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7B. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
=================================================================================================================================
VANGUARD EQUITY INCOME FUND
Control Number: XXX XXX XXX XXX XX
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" EACH PROPOSAL AND NOMINEE. To Vote
"FOR"each proposal, simply click the'Submit' button below.
View the Proxy Statement
Proposal 1. Elect the following nominees as trustees:
(01) John J. Brennan, (02)Charles D. Ellis, ( )FOR ALL
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( )WITHHOLD ALL
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr., ( )FOR ALL EXCEPT: (Enter the number(s) of the
(07) J. Lawrence Wilson nominee(s) you wish to exclude, separated by a
comma,in the text field below.)
[_______________________]
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity
Fund.
- -----------------------------------------------------------------------------------------------------------------------------------
Proposal 2. Change the fund's policy on investing in other mutual funds. ( )FOR ( )AGAINST ( )ABSTAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 3. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 4. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 5. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 6. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7A. Not Applicable. Your fund is not seeking a vote for this proposal.(X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7B. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
================================================================================================================================
VANGUARD CAPITAL VALUE FUND
Control Number: XXX XXX XXX XXX XX
THE TRUSTEES RECOMMEND THAT YOU VOTE "FOR" EACH PROPOSAL AND NOMINEE. To Vote
"FOR"each proposal, simply click the 'Submit' button below.
View the Proxy Statement
Proposal 1. Elect the following nominees as trustees:
(01) John J. Brennan, (02)Charles D. Ellis, ( )FOR ALL
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen, ( )WITHHOLD ALL
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr., ( )FOR ALL EXCEPT: (Enter the number(s) of the
(07) J. Lawrence Wilson nominee(s) you wish to exclude, separated by a
comma,in the text field below.)
[_______________________]
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity
Fund.
- -----------------------------------------------------------------------------------------------------------------------------------
Proposal 2. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 3. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLe
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 4. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 5. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 6. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7A. Not Applicable. Your fund is not seeking a vote for this proposal.(X)NOT APPLICABLE
- ----------------------------------------------------------------------------------------------------------------------------------
Proposal 7B. Not Applicable. Your fund is not seeking a vote for this proposal. (X)NOT APPLICABLE
=================================================================================================================================
Press this button to [SUBMIT] your Proxy Vote.
[THE VANGUARD GROUP LOGO]
YOUR VOTE HAS BEEN SUBMITTED. THANK YOU FOR VOTING ONLINE AND KEEPING OUR FUND
COSTS LOW.
- --------------------------------------------------------------------------------
By using the ezVote(SM) consolidated ballot, you have voted on behalf of the
following individual ballots.
xxx xxx xxx xxx xx xxx xxx xxx xxx xx xxx xxx xxx xxx xx xxx xxx xxx xxx xx
- --------------------------------------------------------------------------------
Proposal 1. Elect the following nominees as trustees:
(01) John J. Brennan, (02)Charles D. Ellis, (X)FOR ALL
(03) Rajiv L. Gupta, (04) JoAnn Heffernan Heisen,
(05) Burton G. Malkiel*, (06) Alfred M. Rankin, Jr.,
(07) J. Lawrence Wilson
*NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity
Fund.
Proposal 2. Change certain funds' policy on investing in other mutual funds. (X)FOR
Proposal 3. Authorize the trustees of certain index funds to change target
indexes. (X)FOR
Proposal 4. Reclassify certain index funds as nondiversified. (X)FOR
Proposal 5. Change two money market funds' industry concentration policy. (X)FOR
Proposal 6. Change certain bond and balanced funds' policy on borrowing money. (X)FOR
Proposal 7A. Change the Utilities Income Fund's investment objective. (X)FOR
Proposal 7B. Change the Utilities Income Fund's concentration in utilities
stocks. (X)FOR
- ------------------------------------------------------------------------------------------------
[CHANGE VOTE] [PRINTER FRIENDLY CONFIRMATION] [VOTE ANOTHER PROXY]
[GO TO VANGUARD.COM]
[SHIP]
[VANGUARD GROUP LOGO]
September 2002
Dear Client:
As you may know, all Vanguard funds will host a shareholder meeting on December
3, 2002, to ask shareholders to elect a board of trustees for each fund and to
approve certain policy changes recommended by each fund's board of trustees.
Because you owned fund shares as of the record date of September 6, you are
entitled to vote on these important fund proposals.
In order to make the voting process easier for you, we have included a
consolidated proxy form, which enables you to vote just once for all accounts
registered to the same Tax ID number and address. If you don't want to use the
consolidated voting method you can vote each enclosed individual ballot
separately.
Here's how you can vote:
o CONSOLIDATED VOTING:
o Complete the consolidated proxy form on the next page.
o Sign and date the consolidated form.
o Return the consolidated form and all unsigned individual
ballots together in the same mailing.
o INDIVIDUAL VOTING:
o By Mail: Complete each individual ballot, sign and date each ballot,
and return all ballots in the envelope provided.
o By Internet or Phone: Follow the instructions on the top of your
individual ballots if you wish to vote by Internet or phone.
Important Notes:
1) Before voting, read the proxy statement carefully for an explanation of
each proposal.
2) Your proxy will be voted FOR each proposal unless you specify otherwise.
3) Your votes will count only for the funds actually considering specific
proposals.
4) The Board of Trustees recommends a vote FOR all proposals and nominees.
CONSOLIDATED PROXY FORM
- ----------------------------------------------------------------------------------------------------------------------------------
PROPOSALS: FOR AGAINST FOR ALL
ALL ALL EXCEPT
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
1. Elect the following nominees as trustees: ( ) ( ) ( )
(01) John J. Brennan, (02) Charles D. Ellis, (03) Rajiv L. Gupta,
(04) JoAnn Heffernan Heisen, (05) Burton G. Malkiel*, (06) Alfred M.
Rankin, Jr., (07) J. Lawrence Wilson
* NOT a nominee for Vanguard Equity Income Fund or Vanguard Growth Equity Fund.
Write number(s) of excluded nominee(s) on the line below:
-----------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
2. Change certain funds' policy on investing in other mutual funds. ( ) ( ) ( )
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
3. Authorize the trustees of certain index funds to change target indexes. ( ) ( ) ( )
- ---------------------------------------------------------------------------------------------------- --------------- --------------
- ---------------------------------------------------------------------------------------------------- --------------- --------------
4. Reclassify certain index funds as nondiversified. ( ) ( ) ( )
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
5. Change two money market funds' industry concentration policy. ( ) ( ) ( )
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
6. Change certain bond and balanced funds' policy on borrowing money. ( ) ( ) ( )
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
7A. Change the Utilities Income Fund's investment objective. ( ) ( ) ( )
B. Change the Utilities Income Fund's concentration in utilities stocks. ( ) ( ) ( )
- ------------------------------------------------------------------------------------------------------------------------------------
By signing this proxy ballot, I appoint John J. Brennan, J. Lawrence Wilson, and
R. Gregory Barton as my Attorneys to vote all Vanguard fund shares that I am
entitled to vote at the Special Meeting of Shareholders to be held at 9:30 a.m.,
E.T., on December 3, 2002, and at any adjournments thereof. Any one of my
Attorneys may vote my shares as specified on this ballot, vote any other matters
that arise at the meeting in accordance with his best judgment, and appoint
substitute Attorneys to vote on my behalf. I revoke any previous proxies that I
have executed, and acknowledge receipt of the Notice of Special Meeting of
Shareholders and the proxy statement. PROXY SOLICITATION BY THE BOARD OF
TRUSTEES.
NOTE: All required shareholders should sign exactly as their names appear on
this ballot. When signing in a fiduciary capacity (e.g. trustee, etc.), please
so state. Signers for corporate and partnership accounts should be authorized
persons and indicate their title.
____________________________________________
Signature(s) (and Title(s), if applicable)
Date ___________, 2002
VANGUARD PHONE VOTING
FOR THE SHAREHOLDER MEETING TO BE HELD DECEMBER 3, 2002
When the shareholder dials the toll-free number indicated on his/her proxy card,
he/she will hear:
(Speech A) "Welcome to Vanguard's touch-tone voting system. Please enter the
master control number located on the upper portion of your proxy card."
SCENARIO I: FOR SHAREHOLDERS WHO HAVE RECEIVED A SINGLE ACCOUNT PROXY CARD
When the shareholder enters the control number he/she will hear:
(Speech B) "To vote as the Trustees recommend on all proposals, press 1. To vote
on each proposal separately, press 0."
If the shareholder presses 1after Speech B, he/she will hear:
(Speech C) "You have voted as the Trustees recommend on all proposals. If this
is correct, press 1. If incorrect, press 0."
If the shareholder presses 1 after Speech C, he/she will hear:
(Speech D) "Thank you for voting. If you have received more than one proxy card,
you must vote each card separately. To vote another proxy card, press 1, To end
this call, press 0." Pressing 1 takes the caller back to Speech A and the voting
process is repeated for a new control number. Pressing 0 to end the call does
just that and the shareholder will hear:
(Speech E) "Thank you for voting." Call is terminated.
If the shareholder presses 0 after Speech C (to indicate an incorrect vote),
he/she will hear Speech B again and the voting process will proceed as above.
If the shareholder presses 0 after Speech B (to vote each proposal separately),
he/she will hear:
(Speech F) "Proposal 1: To vote FOR all nominees, press 1. To withhold from all
nominees, press 9. To withhold from an individual nominee press 0."
If the shareholder presses 0 after Speech E (to withhold from a nominee), he/she
will hear:
(Speech G) "Enter the two-digit number that appears in front of the nominee's
name that you DO NOT wish to vote for."
When the shareholder enters a two-digit number, he/she will hear:
(Speech H) "Press 1 to withhold from another nominee or press 0 if you have
completed voting for nominees."
If the shareholder presses 1, he/she will hear Speech G again and the process
repeats until he/she finally presses 0 to indicate completion of nominee voting.
If the shareholder presses 0 to indicate that nominee voting is complete, or if
he/she presses 1 or 9 after Speech F, he/she will hear:
(Speech I) "Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
1
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 2, he/she will hear:
(Speech K) "Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 3, he/she will hear:
(Speech L) "Proposal 4: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 4, he/she will hear:
(Speech M) "Proposal 5: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 5, he/she will hear:
(Speech N) "Proposal 6: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 6, he/she will hear:
(Speech O) "Proposal 7A: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
2
When the shareholder has voted on Proposal 7A, he/she will hear:
(Speech P) "Proposal 7B: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 7B, he/she will hear: (Speech Q)
"Your votes have been cast as follows (vote for each applicable proposal is
given). If this is correct, press 1. If incorrect, press 0."
If the shareholder presses 0 after Speech Q (to indicate an incorrect vote),
he/she will hear Speech B again and the voting process will proceed as above.
If the shareholder presses 1 after Speech Q, he/she will hear:
(Speech D) "Thank you for voting. If you have received more than one proxy card,
you must vote each card separately. To vote another proxy card, press 1, To end
this call, press 0." Pressing 1 takes the caller back to Speech A and the voting
process is repeated for a new control number. Pressing 0 to end the call does
just that and the shareholder will hear:
(Speech E) "Thank you for voting." Call is terminated.
SCENARIO II: FOR SHAREHOLDERS WHO HAVE RECEIVED A CONSOLIDATED PROXY CARD
When the shareholder enters the control number he/she will hear:
(Speech R) "The consolidated ballot allows you to vote just once for all your
accounts registered to the same address and tax ID number. To cast a
consolidated vote for all of your accounts at once, press 1. To vote each of
your accounts separately, press 0."
If the shareholder presses 1 after Speech R, he/she will hear:
(Speech S) "To vote as the Trustees recommend on all proposals for all accounts,
press 1. To vote on each proposal separately, press 0."
If the shareholder presses 1 after Speech S, he/she will hear:
(Speech T) "You have voted as the Trustees recommend on all proposals for all
accounts. If this is correct, press 1. If incorrect, press 0."
If the shareholder presses 1 after Speech T, he/she will hear:
(Speech D) "Thank you for voting. If you have received more than one proxy card,
you must vote each card separately. To vote another proxy card, press 1, To end
this call, press 0." Pressing 1 takes the caller back to Speech A and the voting
process is repeated for a new control number. Pressing 0 to end the call does
just that and the shareholder will hear:
3
(Speech E) "Thank you for voting." Call is terminated.
If the shareholder presses 0 after Speech T (to indicate an incorrect vote),
he/she will hear Speech R again and the voting process will proceed as above.
If the shareholder presses 0 after Speech S (to vote each proposal separately
for all accounts) he/she will hear:
(Speech F) "Proposal 1: To vote FOR all nominees, press 1. To withhold from all
nominees, press 9. to withhold from an individual nominee press 0."
If the shareholder presses 0 after Speech E (to withhold from a nominee), he/she
will hear:
(Speech G) "Enter the two-digit number that appears in front of the nominee's
name that you DO NOT wish to vote for."
When the shareholder enters a two-digit number, he/she will hear:
(Speech H) "Press 1 to withhold from another nominee or press 0 if you have
completed voting for nominees."
If the shareholder presses 1, he/she will hear Speech G again and the process
repeats until he/she finally presses 0 to indicate completion of nominee voting.
If the shareholder presses 0 to indicate that nominee voting is complete, or if
he/she presses 1 or 9 after Speech F, he/she will hear:
(Speech I) "Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 2, he/she will hear:
(Speech K) "Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 3, he/she will hear:
(Speech L) "Proposal 4: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 4, he/she will hear:
4
(Speech M) "Proposal 5: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 5, he/she will hear:
(Speech N) "Proposal 6: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 6, he/she will hear:
(Speech O) "Proposal 7A: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 7A, he/she will hear:
(Speech P) "Proposal 7B: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 7B, he/she will hear:
(Speech Q) "Your votes have been cast as follows (vote for each applicable
proposal is given). If this is correct, press 1. If incorrect, press 0."
If the shareholder presses 0 after Speech Q (to indicate an incorrect vote),
he/she will hear Speech A again and the voting process will proceed as above.
If the shareholder presses 1 after Speech Q, he/she will hear:
(Speech D) "Thank you for voting. If you have received more than one proxy card,
you must vote each card separately. To vote another proxy card, press 1, To end
this call, press 0." Pressing 1 takes the caller back to Speech A and the voting
process is repeated for a new control number. Pressing 0 to end the call does
just that and the shareholder will hear:
(Speech E) "Thank you for voting." Call is terminated.
5
If the shareholder presses 0 after Speech R (to vote each account separately),
he/she will hear:
(Speech U) "We are now ready to accept your vote for individual control number
XXX XXX XXX XXX XX>" (individual control number is heard by the shareholder).
And then:
(Speech B) "To vote as the Trustees recommend on all proposals, press 1. To vote
on each proposal separately, press 0."
If the shareholder presses 1 after Speech B, he/she will hear:
(Speech V) "You have voted as the Trustees recommend on all proposals for this
account. If this is correct, press 1. If incorrect, press 0."
If the shareholder presses 1 after Speech V, he/she will hear:
(Speech U) "We are now ready to accept your vote for individual control number
XXX XXX XXX XXX XX>" (individual control number is heard by the shareholder).
And then:
(Speech B) "To vote as the Trustees recommend on all proposals, press 1. To vote
on each proposal separately, press 0."
If the shareholder presses 1 after Speech V, he/she will hear:
(Speech U) "We are now ready to accept your vote for individual control number
XXX XXX XXX XXX XX>" (individual control number is heard by the shareholder).
or
(Speech D) "Thank you for voting. If you have received more than one proxy card,
you must vote each card separately. To vote another proxy card, press 1, To end
this call, press 0." Pressing 1 takes the caller back to Speech A and the voting
process is repeated for a new control number. Pressing 0 to end the call does
just that and the shareholder will hear:
(Speech E) "Thank you for voting." Call is terminated.
If the shareholder presses 0 after Speech B (to vote each proposal separately),
he/she will hear:
(Speech F) "Proposal 1: To vote FOR all nominees, press 1. To withhold from all
nominees, press 9. to withhold from an individual nominee press 0."
If the shareholder presses 0 after Speech E (to withhold from a nominee), he/she
will hear:
(Speech G) "Enter the two-digit number that appears in front of the nominee's
name that you DO NOT wish to vote for."
When the shareholder enters a two-digit number, he/she will hear:
(Speech H) "Press 1 to withhold from another nominee or press 0 if you have
completed voting for nominees."
6
If the shareholder presses 1, he/she will hear Speech G again and the process
repeats until he/she finally presses 0 to indicate completion of nominee voting.
If the shareholder presses 0 to indicate that nominee voting is complete, or if
he/she presses 1 or 9 after Speech F, he/she will hear:
(Speech I) "Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 2, he/she will hear:
(Speech K) "Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 3, he/she will hear:
(Speech L) "Proposal 4: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 4, he/she will hear:
(Speech M) "Proposal 5: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 5, he/she will hear:
(Speech N) "Proposal 6: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 6, he/she will hear:
7
(Speech O) "Proposal 7A: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 7A, he/she will hear:
(Speech P) "Proposal 7B: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press
0." (This speech plays if the proposal is applicable to the fund for which the
shareholder is voting.)
or
(Speech J) "Not applicable. Your fund is not seeking a vote for this proposal."
(This speech plays if the proposal is not applicable to the fund for which the
shareholder is voting.)
When the shareholder has voted on Proposal 7B, he/she will hear:
(Speech U) "We are now ready to accept your vote for individual control number
XXX XXX XXX XXX XX>" (individual control number is heard by the shareholder).
or
(Speech Q) "Your votes have been cast as follows (vote for each applicable
proposal is given). If this is correct, press 1. If incorrect, press 0."
If the shareholder presses 0 after Speech Q (to indicate an incorrect vote),
he/she will hear Speech A again and the voting process will proceed as above.
If the shareholder presses 1 after Speech Q, he/she will hear:
(Speech D) "Thank you for voting. If you have received more than one proxy card,
you must vote each card separately. To vote another proxy card, press 1, To end
this call, press 0." Pressing 1 takes the caller back to Speech A and the voting
process is repeated for a new control number. Pressing 0 to end the call does
just that and the shareholder will hear:
(Speech E) "Thank you for voting." Call is terminated.
8